Hortonworks Reports Third Quarter 2016 Financial Results 

SANTA CLARA, Calif., Nov. 4 -- Hortonworks, Inc. (NASDAQ: HDP), a leading innovator of open and connected data platforms, has 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 world’s 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. Lenovo’s 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.

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.

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.

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.

Source: Hortonworks