Why Cloudera Inc (NYSE: CLDR) stock crashed

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Cloudera Inc (NYSE: CLDR) stock lost over 15.3% on 14th March, 2019 (As of 11:35 am GMT-4; Source: Google finance) after the company posted mixed results for the fourth quarter of FY 18. Cloudera, which closed its acquisition of rival Hortonworks in early January, said fourth-quarter losses totaled $85.5 million. Cloudera has experienced significant year-over-year improvement in operating expense rations and operating margins. This is driven by the scale and efficiency, including the go-to-market refinements made earlier in the year.

CLDR in the fourth quarter of FY 19 has reported the adjusted loss per share of 15 cents, missing the analysts’ estimates for the adjusted loss per share of 11 cents, according to FactSet. The company had reported the adjusted revenue growth of 37 percent to $144.5 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $121 million. Subscription revenue was $123.0 million, an increase of 42% from the fourth quarter of fiscal 2018. The Hortonworks business, which closed its fiscal year on December 31, 2018 and its books as a stand-alone entity on January 2, 2019, contributed $20 million of total revenue to the combined company’s results in the fourth quarter. Total gross margin for Q4 was 78%, driven by subscription gross margin of 88%.

CLDR has predicted it would finish the current year with adjusted losses of 32 cents a share to 36 cents a share on sales of $835 million to $855 million. Analysts on average were modelling annual losses of 26 cents a share on sales of $538.4 million, according to FactSet, though it was not immediately clear if all of those analysts were including Hortonworks in their estimates.

For the first quarter of fiscal 2020, the company expects the total revenue to be in the range of $187 million to $190 million. Subscription revenue is expected to be in the range of $154 million to $156 million. Non-GAAP net loss per share is expected to be in the range of $0.25 to $0.22 per share

For FY 2020, the company expects total revenue to be in the range of $835 million to $855 million, representing approximately 76% year-over-year growth. Subscription revenue is expected to be in the range of $695 million to $705 million, representing approximately 72% year-over-year growth. Operating cash flow is expected to be in the range of negative $40 million to negative $30 million, Non-GAAP net loss per share is expected to be in the range of $0.36 to $0.32 per share and adjusted ARR is expected to be in the range of $800 million to $825 million, representing 18% to 21% year-over-year growth.

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