Cloudera stock surges on better fiscal outlook, acquires Arcadia Data

Cloudera (NYSE: CLDR) reported better-than-expected second quarter results. In addition, the company reported strong fiscal outlook resulting in the stock rising 7% in the after-market trading. Cloudera also announced separately that it is acquiring cloud-based business intelligence firm Arcadia Data.

The company’s stock dwindled above 40% in June after the company lowered its sales outlook for the fiscal 2020 period. The resignation of CEO Tom Reilly further impacted the stock. Cloudera’s stock is down 52% in the last 12 months as the merger with its rival Hortonworks in October 2018 is not yielding expected results.

Q2 Performance

Thanks to improved subscription and services performance, revenue improved to $196.7 million and adjusted loss per share came in at 2 cents per share. Q2 results surpassed street estimates by a good margin.

In the first quarter, Cloudera guided sales of $180-183 million and non-GAAP loss of 8 to 11 cents per share, while the street was anticipating top line of $182 million and loss of 10 cents per share.

Annualized recurring revenue (ARR) rose 16% over prior year and clients with more than $100,000 ARR increased to 953, an addition of 24 customers from last quarter.

Operating expenses more-than-doubled to $228.6 million compared to $110 million reported last year. The surge in expenses are primarily attributed to increased investments in product offerings and expanding the sales and marketing team.

Outlook Update

For the Q3 period, Cloudera expects revenue of $187-190 million with ARR of $685-695 million. On a non-GAAP basis, loss per share is projected to come in at 6 to 8 cents. Analysts are guiding sales of $188.6 million and adjusted loss of 5 cents per share.

Looking ahead for the fiscal period, the company has raised it sales outlook. It now expects top line of $765-775 million and ARR of $685-720 million. Cloudera also has narrowed its loss outlook to 24-28 cents per share for the full-year. The street is expecting top line of $752.5 million and loss of 31 cents per share.

Last quarter, the company scaled back it guidance which failed to impress the street. Revenue was anticipated in the range of $745-765 million with annual recurring revenue expected to grow 0-10%. Non-GAAP loss per share is projected at 28 to 32 cents. 

Icahn Touch

Last month, activist investor Carl Icahn unveiled that he has acquired 12.6% stake in Cloudera. Icahn has been buying the company’s shares since July. Icahn has made additional purchases after the announcement and now holds 18.36% stake in the data cloud firm.

It’s no-brainer that Icahn is known for buying under-valued firms and make changes to the management to unlock value. It would be interesting to see how the billionaire investor is going to plan his moves in the near future.

After the news broke out, the stock price has recovered 38% and currently trading at $7 mark compared to June’s stock price level of $5.

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