Cloudera stock plummets after posting weak guidance

  • Cloudera's results for the fourth quarter did beat expectations, but management said the company ran into issues.
  • The company is making changes in its field sales organization.
Cloudera CEO Tom Reilly.
Matthew Busch | Bloomberg | Getty Images
Cloudera CEO Tom Reilly.

Cloudera stock fell more than 28 percent after the company posted guidance that fell below analysts' expectations. But for the fourth quarter of Cloudera's 2018 fiscal year, which ended Jan. 31, the company did beat estimates.

- Earnings: Loss of 10 cents per share, excluding certain items, vs. 23 cents as expected by analysts, according to Thomson Reuters.

- Revenue: $103.45 million in revenue, vs. $98.7 million as expected by analysts, according to Thomson Reuters.

For the first quarter of its 2019 fiscal year, Cloudera said in a statement that it's expecting a net loss of 17 to 19 cents per share, excluding certain items, on $101 million to $102 million in revenue. Analysts polled by FactSet were expecting a loss of 17 cents per share but $102.4 million in revenue, according to StreetAccount.

For the full 2019 fiscal year, Cloudera estimates it will post a loss of 59 to 62 cents per share, excluding certain items, on $435 million to $445 million in revenue. That's below the FactSet consensus estimates of a loss totaling 59 cents per share, excluding certain items, and $460.5 million in revenue, StreetAccount said.

In Cloudera's full 2018 fiscal year, even as revenue grew considerably, losses did, too. Excluding certain items, though, in the 2018 fiscal year Cloudera cut its loss from operations, coming in at $96.6 million, compared with $140.3 million in the previous fiscal year.

Cloudera started trading on the New York Stock Exchange last year. The company's competitors include Hortonworks, as well as cloud infrastructure providers like Amazon, Google and Microsoft.

The majority of Cloudera's revenue comes from subscriptions. In the 2018 fiscal fourth quarter, Cloudera grew its subscription revenue by 50 percent.

But on a call with analysts after releasing its results, Cloudera CEO Tom Reilly said in the fourth quarter the company pursued too many new customers outside of its target market and fell short in bookings, specifically in the areas of existing customer expansion. The company also found that it was taking more money to acquire new customers and increase spending among existing customers.

Cloudera will make changes in its field sales organization, with specialists coming in to focus on cloud computing, machine learning and analytics, Reilly said. The company is also looking for a new head of sales who can take the company to $1 billion in revenue, he said.

The corporate changes will generate "some uneven results" especially in the first half of the company's 2019 fiscal year, said Cloudera's chief financial officer, Jim Frankola. The company should start benefiting from the changes in the second half of the fiscal year, Reilly said.

The company is optimistic in the long run, "but we want to be prudent and reflect the potential disruption associated with the field changes," Frankola said.

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