Q4 Earnings Preview: Watch out for merger-related updates from Cloudera

Cloudera (NYSE: CLDR) is scheduled to report its fourth-quarter results on March 13 after the bell. More than the quarterly earnings, investors would be expecting more updates from the management on the recently completed merger with Hortonworks.

How the company will benefit post the integration and what are the synergies and future plans are the key questions shareholders would be interested to know when the enterprise cloud data provider conducts the conference call with analysts on Wednesday.

After hitting a new 52-week low of $10.07 in December last week, Cloudera has recovered since then post the news about its merger with Hortonworks lifting the share price about 30% in 2019. On the expectations from the street, Q4 loss per share is forecasted at $0.11, flat over last year. Revenues are going to witness a 17% jump to $121.07 million.

Last quarter, Cloudera guided revenues to be between $119 million and $122 million and adjusted loss is going to be in the range of $0.12 to $0.10 per share. Subscription revenue is forecasted to see a 21% jump to $101 million to $103 million. However, it’s worth noting that the guidance is not taking into account the Hortonworks deal.

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Merger Benefits

Post the Hortonworks merger, key business metrics for the combined entity is going to get a lift as the synergies come into play in the next fiscal year. One can expect solid numbers in terms of subscription revenues and annual recurring revenues from its clients. The customer base is going to expand post the Hortonworks deal, which is going to result in better margins and bottom line numbers.

In its new avatar, Cloudera is now better positioned to take on its nimble rivals who are bigger and better in size and scale. The new entity has the resources and ability to come up with products at the right time based on the demand. It is also expected to bring in cost synergies which can be utilized for product development.

Intense Rivals

However, the company is expected to witness tough competition from its peers. On the open source front, Cloudera would be challenged by MapR; on the distributed framework space Databricks is a tough competitor.

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Moving to the cloud space, Cloudera would be now taking on Amazon (AMZN), Microsoft (MSFT) and Google (GOOGL). It would be interesting to see how the merger is going to help the firm to clinch more customers from the established juggernauts in the next fiscal year.

Future Tense

Last, but not least, Cloudera needs to focus on becoming a profitable company on a sustainable basis. With the initial steps being taken in the right direction, now the management has its task cut out in executing the plan to perfection in order to drive profits, improve margins by tackling competition and adding more customers which would vindicate the completed deal.

The fiscal year 2020 is going to be a crucial year for the enterprise data cloud provider to deliver. Until the positive signs come out in the impending quarters, shareholders would be cautiously optimistic about the future.

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