8-K

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): August 3, 2017

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

(Registrant’s 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Item 2.02. Results of Operations and Financial Condition.

On August 3, 2017, Hortonworks, Inc. (the “Company”) issued a press release announcing financial results for the quarter ended June 30, 2017. 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 June 30, 2017 (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 No.	Description of Exhibit
99.1	Press Release dated August 3, 2017.
99.2	Prepared Remarks dated August 3, 2017.

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: August 3, 2017	By:	/s/ Scott Davidson
		Scott Davidson Chief Financial Officer and Chief Operating Officer

Exhibit Index

Exhibit No.	Description of Exhibit
99.1	Press Release dated August 3, 2017.
99.2	Prepared Remarks dated August 3, 2017.

EX-99.1

Exhibit 99.1

Hortonworks Reports Second Quarter 2017 Revenue of $61.8 Million,

Up 42 Percent Year Over Year

Support Subscription Revenue Increased 48 Percent Year Over Year to $45.8 Million

SANTA CLARA, Calif.—August 3, 2017—Hortonworks, Inc.^® (NASDAQ: HDP), a leading innovator of open and connected data platforms, today announced financial results for the second quarter of 2017.

“The second quarter of 2017 was a significant milestone for Hortonworks, as we set another record revenue target by growing revenue 42 percent year over year,” said Rob Bearden, chief executive officer and chairman of the board of directors of Hortonworks. “The team executed very well and was focused on meeting a set of challenging goals, including significantly expanding our partnership with IBM. We have gained momentum each quarter this year by growing our footprint with existing customers and adding key new enterprise customers. We are on track for our most productive year ever.”

Second Quarter 2017 Financial Highlights

• Revenue: Total GAAP revenue was $61.8 million for the second quarter of 2017, an increase of 42 percent compared to the second quarter of 2016.

• Gross Profit: Total GAAP gross profit was $41.4 million for the second quarter of 2017, compared to $25.6 million for the same period last year. Non-GAAP gross profit was $43.4 million for the second quarter of 2017, compared to $27.0 million for the same period last year. GAAP gross margin was 67 percent for the second quarter of 2017, compared to 59 percent for the same period last year. Non-GAAP gross margin was 70 percent for the second quarter of 2017, compared to 62 percent for the same period last year.

• Operating Loss: GAAP operating loss was $54.5 million for the second quarter of 2017, compared to $64.3 million for the same period last year. Non-GAAP operating loss was $27.0 million for the second quarter of 2017, compared to $41.6 million for the same period last year. GAAP operating margin was negative 88 percent for the second quarter of 2017, compared to negative 147 percent for the same period last year. Non-GAAP operating margin was negative 44 percent for the second quarter of 2017, compared to negative 95 percent for the same period last year.

• Net Loss: GAAP net loss was $56.1 million for the second quarter of 2017, or $0.87 per basic and diluted share, compared to a GAAP net loss of $64.2 million, or $1.12 per basic and diluted share, in the second quarter of 2016. Non-GAAP net loss was $28.6 million for the second quarter of 2017, or $0.44 per basic and diluted share, compared to a non-GAAP net loss of $41.5 million, or $0.72 per basic and diluted share, for the same period last year.

• Deferred Revenue: Deferred revenue was $216.2 million as of June 30, 2017, a 17 percent increase over the $185.4 million reported as of December 31, 2016 and a 64 percent increase over the $131.8 million reported as of June 30, 2016.

• Cash & Investments: Cash and investments totaled $71.8 million as of June 30, 2017, compared to $89.2 million as of December 31, 2016 and $130.1 million as of June 30, 2016.

• Operating Cash: Operating cash used was $11.7 million for the second quarter of 2017, compared to $14.1 million for the same period last year.

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 Named a Leader in Big Data Warehouse Report by Independent Research Firm. In June, we announced that Hortonworks was among the select companies that Forrester Research, Inc. invited to participate in its June 2017 report titled The Forrester Wave™: Big Data Warehouse (BDW), Q2 2017. In this evaluation, Hortonworks was cited as a Leader. The Forrester Report noted, “Hortonworks delivers a viable open source BDW platform. Hortonworks delivers actionable intelligence from all kinds of data-in-motion and data-at-rest. Through its open source strategy, Hortonworks continually evolves its offering by working closely with partners across the Enterprise Data Warehouse ecosystem of tools and vendors. The vendor provides a cost-effective, nimble, and scalable architecture to implement big data warehouses, whether on-premises or in the cloud. All of the technology built into the Hortonworks Data Platform (HDP^TM) is an Apache open source project. Enterprises like Hortonworks’ storage and compute processing, broad data ingestion, data governance, and open source support when deploying BDW.”

• IBM, Hortonworks Expand Partnership to Help Businesses Accelerate Data-Driven Decision Making. In June, we announced an expansion of our relationship with IBM that is focused on extending data science and machine learning to more developers and across the Apache Hadoop ecosystem. The companies are combining HDP with IBM Data Science Experience and IBM Big SQL into new integrated solutions:

• IBM is adopting HDP for its Hadoop distribution and will integrate it with Data Science Experience and machine learning. As a result, this solution will combine for users the rich data security, governance and operational functionality provided by HDP and the advanced analytics and management of the Data Science Experience. IBM will migrate existing IBM BigInsights users to HDP.

• Hortonworks will resell the IBM Data Science Experience with HDP and adopt it as its strategic data science platform, giving developers a fast on-ramp to data science capabilities, including machine learning, advanced analytics and statistics. Also, Hortonworks and IBM will create new solution bundles that integrate HDP with IBM Big SQL, IBM’s structured query language engine for Hadoop.

• Hortonworks Congratulates 2017 Americas Data Heroes Award Winners. In June, we announced the winners of the 2017 Americas Data Heroes Awards. The awards recognized Hortonworks customers who significantly transformed their enterprises by leveraging connected data platforms, highlighting real business value derived from data. The winners were business leaders from TMW Systems, Inc., DHISCO, Inc., Walgreens Boots Alliance, Inc. and Yale New Haven Health System.

• Hortonworks DataFlow 3.0 Simplifies Development of Streaming Analytics Applications. In June, we announced the general availability of Hortonworks DataFlow (HDF^TM) 3.0, the next generation of our open source data-in-motion platform. HDF enables customers to collect, curate, analyze and act on all data in real time, across the data center and cloud. New features include Streaming Analytics Manager for simplifying the process and speeding a streaming application’s time to market, and a new shared repository of schemas which gives customers end-to-end data governance and increased operational efficiency.

• Hortonworks Introduces First Unified Support Subscription Spanning Cloud and Data Center. In June, we announced Hortonworks Flex Support Subscription, a new software support subscription to provide seamless support that is transferable between cloud and on-premises deployments, allowing for simpler adoption of a connected data architecture.

• Mitsubishi Fuso Selects Hortonworks To Power Real-Time Analytics. In May, we announced that Mitsubishi Fuso Truck and Bus Corporation has deployed Microsoft Azure HDInsight powered by HDP in the public cloud to power the company’s connected data architecture.

Financial Outlook

As of August 3, 2017, Hortonworks is providing the following financial outlook for its third quarter and full year 2017:

For the third quarter of 2017, we expect:

Total GAAP revenue of $63.0 million.

GAAP operating margin between negative 95 percent and negative 90 percent, which includes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $32.0 million.

Non-GAAP operating margin between negative 43 percent and negative 39 percent, which excludes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $32.0 million.

For the full year 2017, we expect:

Total GAAP revenue of $247.0 million.

GAAP operating margin between negative 95 percent and negative 90 percent, which includes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $117.0 million.

Non-GAAP operating margin between negative 47 percent and negative 42 percent, which excludes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $117.0 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.

Second Quarter 2017 Earnings Conference Call and Webcast Details

Hortonworks will hold a conference call and webcast to discuss the Q2 2017 results, Q3 2017 and FY 2017 outlook and related matters at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on Thursday, August 3, 2017. 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, basic and diluted net loss per share and expenses 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 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 cost of revenue is calculated as GAAP cost of revenue less stock-based compensation expense. 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 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 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 operating loss is calculated as GAAP operating loss plus 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 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 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 investors 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, expenses or activity in international markets, including the forward-looking statements, 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, 2017, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed on May 9, 2017, 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, Apache NiFi and Apache Spark. Along with its 2,100+ 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 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 June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Support subscription and professional services revenue:
Support subscription	$	45,792		$	31,018		$	87,890		$	58,652
Professional services		16,040			12,619			29,913			26,327
Total support subscription and professional services revenue		61,832			43,637			117,803			84,979
Cost of revenue:
Support subscription		7,227			5,880			13,383			10,781
Professional services		13,240			12,181			24,939			23,636
Total cost of revenue		20,467			18,061			38,322			34,417
Gross profit		41,365			25,576			79,481			50,562
Operating expenses:
Sales and marketing		50,526			46,175			100,745			88,258
Research and development		27,479			25,454			52,985			47,605
General and administrative		17,824			18,240			34,619			44,294
Total operating expenses		95,829			89,869			188,349			180,157
Loss from operations		(54,464	)		(64,293	)		(108,868	)		(129,595	)
Other (expense) income, net		(1,149	)		392			(1,348	)		97
Loss before income tax expense		(55,613	)		(63,901	)		(110,216	)		(129,498	)
Income tax expense		463			296			695			451
Net loss	$	(56,076	)	$	(64,197	)	$	(110,911	)	$	(129,949	)
Net loss per share of common stock, basic and diluted	$	(0.87	)	$	(1.12	)	$	(1.71	)	$	(2.37	)
Weighted-average shares used in computing net loss per share of common stock, basic and diluted		64,356,873			57,314,715			64,834,719			54,716,430

Hortonworks, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

	June 30, 2017			December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	55,458		$	53,332
Short-term investments		16,371			31,764
Accounts receivable, net		75,641			82,368
Prepaid expenses and other current assets		7,143			4,831
Total current assets		154,613			172,295
Property and equipment, net		18,373			19,381
Long-term investments		—			4,084
Goodwill		34,333			34,333
Intangible assets, net		2,685			3,121
Other assets		2,015			1,306
Restricted cash		1,292			1,316
Total assets	$	213,311		$	235,836
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,046		$	6,749
Accrued compensation and benefits		18,863			17,978
Accrued expenses and other current liabilities		10,352			11,752
Deferred revenue		151,903			129,840
Total current liabilities		190,164			166,319
Long-term deferred revenue		64,336			55,550
Other long-term liabilities		2,091			2,605
Total liabilities		256,591			224,474
Stockholders' (deficit) equity:
Preferred stock, par value of $0.0001 per share—25,000,000 shares authorized; none issued or outstanding as of June 30, 2017 and December 31, 2016		—			—
Common stock, par value of $0.0001 per share—500,000,000 shares authorized; 66,144,990 and 61,122,863 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively		7			7
Additional paid-in capital		771,386			714,960
Accumulated other comprehensive loss		(569	)		(1,063	)
Accumulated deficit		(814,104	)		(702,542	)
Total stockholders' (deficit) equity		(43,280	)		11,362
Total liabilities and stockholders' equity	$	213,311		$	235,836

Hortonworks, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(56,076	)	$	(64,197	)	$	(110,911	)	$	(129,949	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,177			1,810			4,235			3,288
Amortization of premiums from investments		82			234			197			518
Amortization of intangible assets		219			219			436			438
Stock-based compensation expense		27,247			21,898			50,622			51,340
Impairment of promissory note and related interest receivable		—			—			—			717
Loss on early exit of lease		—			—			349			—
Effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies		772			(216	)		934			3
Provision for losses on accounts receivable		—			66			—			443
Other		73			(25	)		149			(50	)
Changes in operating assets and liabilities:
Accounts receivable		(6,522	)		3,288			7,957			(7,859	)
Prepaid expenses and other current assets		2,446			2,480			(2,366	)		(988	)
Other assets		352			(107	)		(650	)		(197	)
Accounts payable		1,365			6,680			1,475			6,769
Accrued expenses and other current liabilities		(2,307	)		(1,794	)		(1,721	)		(1,459	)
Accrued compensation and benefits		2,826			2,737			660			3,040
Deferred revenue		15,855			13,079			28,368			24,765
Other long-term liabilities		(226	)		(240	)		(454	)		(575	)
Net cash used in operating activities		(11,717	)		(14,088	)		(20,720	)		(49,756	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments		—			(6,765	)		—			(80,519	)
Proceeds from sales of investments		—			5,995			—			7,316
Proceeds from maturities of investments		6,000			18,780			19,300			40,979
Purchases of property and equipment		(985	)		(4,916	)		(2,203	)		(7,275	)
Change in restricted cash		26			—			26			—
Net cash provided by (used in) investing activities		5,041			13,094			17,123			(39,499	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		1,245			1,240			5,588			5,852
Tax withholding shares		(562	)		(97	)		(562	)		(97	)
Payment of contingent consideration related to an acquisition		—			—			—			(1,625	)
Payments of capital lease liability		(113	)		(39	)		(203	)		(64	)
Payment of fees for line of credit		(26	)		—			(52	)		—
Proceeds from follow-on public offering, net of issuance costs		—			(615	)		—			87,233
Net cash provided by financing activities		544			489			4,771			91,299
Effect of exchange rate changes on cash and cash equivalents		657			(190	)		952			24
Net increase in cash and cash equivalents		(5,475	)		(695	)		2,126			2,068
Cash and cash equivalents—Beginning of period		60,933			38,511			53,332			35,748
Cash and cash equivalents—End of period	$	55,458		$	37,816		$	55,458		$	37,816

Hortonworks, Inc.

Reconciliation of GAAP to Non-GAAP

(in thousands, except share and per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Non-GAAP Gross Profit and Margin:
Gross profit	$	41,365		$	25,576		$	79,481		$	50,562
Stock-based compensation expense		1,989			1,417			3,399			2,775
Non-GAAP gross profit	$	43,354		$	26,993		$	82,880		$	53,337
Gross margin percentages:
GAAP		67	%		59	%		67	%		59	%
Non-GAAP		70	%		62	%		70	%		63	%
Non-GAAP Operating Loss and Margin:
Operating loss	$	(54,464	)	$	(64,293	)	$	(108,868	)	$	(129,595	)
Stock-based compensation expense		27,247			21,898			50,622			51,340
Impairment of promissory note and related interest receivable		—			—			—			717
Loss on early exit of lease		—			—			349			—
Amortization of intangible		219			219			436			438
Litigation expense		—			600			—			600
Non-GAAP operating loss	$	(26,998	)	$	(41,576	)	$	(57,461	)	$	(76,500	)
Operating margin percentages:
GAAP		(88	)%		(147	)%		(92	)%		(153	)%
Non-GAAP		(44	)%		(95	)%		(49	)%		(90	)%
Non-GAAP Net Loss and Net Loss per Share:
Net loss	$	(56,076	)	$	(64,197	)	$	(110,911	)	$	(129,949	)
Stock-based compensation expense		27,247			21,898			50,622			51,340
Impairment of promissory note and related interest receivable		—			—			—			717
Loss on early exit of lease		—			—			349			—
Amortization of intangible		219			219			436			438
Litigation expense		—			600			—			600
Non-GAAP net loss	$	(28,610	)	$	(41,480	)	$	(59,504	)	$	(76,854	)
Weighted-average shares		64,356,873			57,314,715			64,834,719			54,716,430
Non-GAAP net loss per share	$	(0.44	)	$	(0.72	)	$	(0.92	)	$	(1.40	)
Stock-based compensation expense by function:
Cost of revenue	$	1,989		$	1,417		$	3,399		$	2,775
Sales and marketing		9,129			6,039			16,595			11,658
Research and development		11,060			8,778			20,938			16,582
General and administrative		5,069			5,664			9,690			20,325
Stock-based compensation expense	$	27,247		$	21,898		$	50,622		$	51,340

For Additional Information Contact:

Reuben Gallegos

VP, Investor Relations and Corporate Development

rgallegos@hortonworks.com

EX-99.2

Exhibit 99.2

Hortonworks Prepared Financial Remarks for the Second Quarter 2017

SANTA CLARA, Calif. – August 3, 2017 – Hortonworks, Inc.^® (NASDAQ: HDP), a leading innovator of open and connected data platforms, today announced financial results for the second quarter of 2017. 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.

Today we will also host a live 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.

Reuben Gallegos (VP, Investor Relations & Corporate Development)

Thank you. Good afternoon and welcome to Hortonworks’ Q2 2017 Earnings Call. Today we will discuss the results announced in our press release and prepared remarks issued after market close. With me are Rob Bearden (Chairman and CEO) and Scott Davidson (COO and CFO).

During the call, we will make forward-looking statements regarding future events and views about the future financial performance of the company. The statements that we make today are based on assumptions that we believe to be reasonable as of this date and 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 undertake no obligation to update these statements as a result of new information or future events. 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 today’s press release. So, with that said, I will turn the call over to Rob for some opening comments.

Rob Bearden (Chairman and CEO)

Thanks, Reuben. Good afternoon and thanks for joining our earnings call.

As always, I want to start off by thanking our customers, the open source community, our partners and shareholders for their support. Key open source data solutions that power data lakes, streaming analytics and data science to support an array of new business outcomes for our customers are driven by all of you.

For today’s call, I will begin with a review of our business highlights and conclude with several trends and opportunities we are encountering across our marketplace. Afterward, Scott will discuss our financial highlights for the second quarter and provide our outlook for the third quarter and full year 2017.

I am very proud of our entire team’s execution in the second quarter as we grew revenue 42% year-over-year.

We continued to deliver innovation within our product and engineering teams while also driving operational excellence across the company. The programs we put in place last year across the field organization have been successful and served to increase our momentum. Q2 exemplified strong performance across our Americas field organization and robust contribution from our international teams. This past quarter also represented a milestone for our channels organization with the expansion and impact of our IBM partnership.

Business Highlights

In June, we announced a strategic partnership and collaboration with IBM, where they will adopt the Hortonworks Data Platform (HDP) as their Hadoop platform. We will integrate IBM’s industry leading Data Science Experience (DSX) platform into HDP, allowing our joint customers the ability to leverage advanced integration and optimizations for artificial intelligence and machine learning. They will also resell both HDP and HDF while we will adopt and resell DSX and their Big SQL platform.

Importantly, this relationship exemplifies yet another proof point that HDP has become the leading Big-Data platform. IBM is the latest company to align with us and embrace our platforms over the competition. Beyond being beneficial to customers, this partnership is beneficial to the open source community. We are also now both partnering to advance several key Apache projects including Apache Atlas, an open source project focused on data governance. Hortonworks and IBM both have a significant number of committers and the community gets faster and better innovation through our collaborative efforts. I am looking forward to seeing tremendous traction in the market as this partnership begins to flourish, and if the early momentum is any indication, we will deliver great value and results.

We also continue to see great momentum with HDF, which was included in eight of our ten largest deals last quarter. HDF is the only end-to-end platform that collects, curates, analyzes and acts on data in real time from the point of origin through its entire lifecycle. Today, businesses must harness the insights from data everywhere and increasingly, that means the point of creation on connected devices at the edge. With our most recent release, we are improving our customers’ experience by simplifying how they create and deploy streaming analytics applications to deliver real-time analytics across any industry. For example, HDF powers customer engagement at the point of sale for retailers, plant efficiency across the shop floor for manufacturers, smart meter management for utilities operators and asset monitoring and maintenance for property managers. With HDF, customers can capture actionable intelligence in real time and act upon those insights like never before.

Market Trends and Opportunities

Our enterprise customers have embraced our platform offerings of HDP, HDF, Azure HDInsight and Hortonworks Data Cloud for AWS, all of which are delivered on our core multi-tenancy engines with integrated security and governance capabilities. Because the vast majority of our customers are operating in a hybrid environment, we must support them across their on-premise and cloud infrastructure seamlessly. We continue to expect cloud deployments and hybrid architectures to be the norm and, as I have mentioned, we continue to see this across a large proportion of our customer base. In response, we recently launched a support offering that gives optionality, flexibility and latitude to our customers.

This Flex Support Subscription offering enables our customers to obtain support across their entire data infrastructure, whether nodes are operating on-premise, in the cloud or across multiple public clouds. This offering, when combined with our partnerships with Microsoft and AWS, enables us to deliver a consistent

support arrangement geared to meet the evolving needs of our enterprise customers. This support offering will continue to help us increase our penetration of Fortune Global 500 companies and support their flexibility and evolving requirements.

And now, turning to enterprise customer adoption, we proudly count over half of the Fortune 100 and more than a quarter of the Fortune Global 500 companies as customers, which illustrates a continued strong demand from global enterprises across virtually every industry. We continue to see solid penetration across multiple industries, with over 80% of Fortune 100 telecommunications and media companies, more than 70% of Fortune 100 retailers, over 60% of Fortune 100 financial services companies and also over 80% of Fortune 100 automotive and industrials companies.

Within the retail segment, a typical use case we see is a 360-degree view of the consumer. This helps to generate revenue through more efficient promotions and improved customer satisfaction.

Within the insurance industry, data is used to provide a more efficient claims management system, reducing consumer risk and protecting revenue. This allows our insurance customers to deliver competitive premiums with a usage-based consumption model. Recent industry research has highlighted that approximately 92% of the property and casualty insurers are pursuing data and analytics solutions, and furthermore, Hadoop is at the core of their initiatives. Companies such as Progressive in the U.S. and Munich Re and Hastings Direct in Europe are adopting HDP and HDF to power their modern data architectures.

Within the automotive industry, the “Connected Car” creates a data-rich environment including signals from the vehicle, the external environment and the municipal infrastructure. Within this blend of data flow there is a need to increase driver safety while also reducing traffic congestion. In Las Vegas, the Nevada Center for Advanced Mobility is using our platforms as part of its Connected Vehicle pilot program to improve pedestrian safety and traffic flow.

Within the agricultural industry, Land O’Lakes is in fact a data-driven company. They have partnered with us to build a digital command center with real-time analytics, which combines social media, clickstream and search engine results to derive insights they have never had the ability to obtain before.

Every day, we continue to see evidence that companies are selecting open source data platforms over platforms with proprietary extensions, and we will continue to invest in meeting key enterprise requirements. Today, our open source security and governance technologies outperform our competitors’ proprietary IP, making open source the safest option for enterprises. Our open model consistently delivers new technology to market faster than our competitors, and in this world, where seconds count, our open model and time to market are key differentiators. Looking forward, we see tremendous growth opportunities both in the U.S. and internationally, where we see an accelerating number of large enterprises adopting our platforms, services and solutions to drive their business transformations. We also continue to see a steady pace of migrations from competitive platforms onto our solutions.

Summary

We are clearly excited by the customer response to our announcements at our annual DataWorks Summit, where we hosted several thousand global attendees, including many of today’s thought leaders such as the Yale School of Medicine, Pinsight Media and TMW Systems. We heard from many customers who collectively revealed how our technology is empowering their enterprises to identify and exploit actionable intelligence from data in ways not previously possible with any other legacy technology or architecture.

And, I want to make sure everyone understands how proud I am of the execution by our Hortonworks team and how excited we are to be uniquely positioned to support our customers as they transform their businesses into leading-edge, data-driven enterprises heading into the latter part of 2017. Most importantly, we are not doing this alone – again, we want to thank our customers, the open source community, our partners, employees and shareholders.

That concludes my remarks and now Scott will recap the Q2 financial highlights. Scott?

Scott Davidson (COO and CFO)

Thanks, Rob. I will start by providing details on our second quarter and conclude with our outlook for the third quarter and full year 2017.

Total GAAP revenue for the second quarter was $61.8 million, up 42% year-over-year, and accelerating from the 35% year-over-year growth in the first quarter of 2017. Support revenue was $45.8 million, up 48% year-over-year, and represented 74% of total revenue.

From a deal perspective:

• We had 10 deals over $1 million, compared to 6 in Q2 2016, and 8 of the deals included HDF;

• Average deal size was approximately $150 thousand;

• Weighted-average dollar contract durations remained 19 months. As a result, deferred revenue mix was 70% short-term in duration; and

• The average dollar-based net expansion rate was 124% over the trailing four-quarter period.

International GAAP revenue grew 48% year-over-year in the second quarter. International GAAP revenue accounted for approximately 29% of our total GAAP revenue in the second quarter of 2017. We have continued to make targeted investments internationally in EMEA and APAC to further expand our presence across several territories to continue this momentum.

For Q2 2017, GAAP gross margin was 67%, compared to 59% for the same period in 2016. Non-GAAP gross margin expanded by 8 percentage points to 70%, compared to 62% for the same period in 2016.

Turning to expenses, Q2 2017 GAAP total operating expense was $95.8 million, compared to $89.9 million for the same period in 2016. Non-GAAP total operating expense was $70.4 million, compared to $68.6 million for the same period in 2016, only growing 3% year-over-year. So, to re-emphasize, revenue increased by 42% year-over-year, while expenses increased by 3% year-over-year. This reflects the spending discipline we have put in place as we drive toward our target of achieving operating cash flow break-even in the fourth quarter of 2017.

GAAP operating loss was $54.5 million for the second quarter of 2017, compared to $64.3 million for the same period last year. GAAP operating margin for the second quarter of 2017 was a negative 88%, compared to a negative 147% for the same period last year. Non-GAAP operating loss narrowed to $27.0 million for the second quarter of 2017, compared to $41.6 million for the same period in 2016. Non-GAAP operating margin was a negative 44% for the second quarter of 2017, compared to a negative 95% for the same period in 2016 – an improvement of 51 percentage points.

Q2 2017 GAAP net loss was $56.1 million, or $0.87 per basic and diluted share. This compares to a GAAP net

loss of $64.2 million, or $1.12 per basic and diluted share, for the same period in 2016. Q2 2017 non-GAAP net loss was $28.6 million, or $0.44 per basic and diluted share. This compares to a non-GAAP net loss of $41.5 million, or $0.72 per basic and diluted share, for the same period in 2016.

The deferred revenue balance was $216.2 million as of June 30, 2017, an increase of 17% over the $185.4 million reported as of December 31, 2016, and a 64% increase over the $131.8 million reported as of June 30, 2016.

Operating cash flow was negative $11.7 million for the second quarter, a 17% improvement compared to negative $14.1 million for the same period last year.

We exited the second quarter with a total cash and investments balance of approximately $71.8 million and have access to another $30.0 million via our revolving credit facility.

Our Outlook

As of August 3, 2017, Hortonworks is providing the following financial outlook for the third quarter and full year 2017:

For the Third Quarter 2017

We expect

• Total GAAP revenue of $63.0 million.

• GAAP operating margin between negative 95% and negative 90%, which includes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $32.0 million.

• Non-GAAP operating margin between negative 43% and negative 39%, which excludes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $32.0 million.

For the Full Year 2017

We expect

• Total GAAP revenue of $247.0 million.

• GAAP operating margin between negative 95% and negative 90%, which includes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $117.0 million.

• Non-GAAP operating margin between negative 47% and negative 42%, which excludes stock-based compensation and related expenses and amortization of purchased intangibles of approximately $117.0 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.

That concludes my financial recap. Operator, please open the line for Q&A. Thank you.