UPDATED 17:11 EDT / FEBRUARY 09 2017

BIG DATA

Big data leader Hortonworks’ stock soars as earnings beat forecasts

Getting its sales organization back on track after a stumble last year, big data software company Hortonworks Inc. reported better-than-expected earnings for the second quarter in a row.

The company, whose software helps companies collect and analyze massive amounts of data across networks of computers and the cloud, reported a loss of $30.6 million, or 50 cents a share, not including certain costs such as stock compensation, compared with a year-ago loss of $50.6 million, or 72 cents a share. Revenues rose 39 percent, to $52 million.

Analysts on average had expected a loss of 60 cents a share on $48 million in revenues. Thanks to easily beating those forecasts, investors piled in after-hours. In late trading, shares shot up 12 percent initially, before falling back to an 8 percent rise. They had risen almost 3 percent, to $10.17 a share, in regular trading today.

For the first quarter, the company said it expects revenues of $52 million, just a hair under analysts’ expectations of $52.1 million. Analysts expect Hortonworks to post a 53-cent loss. For the full year, it forecast revenues in the range of $235 million to $240 million.

Chief Executive Rob Bearden (pictured) said during the earnings conference call that Hortonworks won nine new contracts worth more than $1 million, up from five a year ago. “Our competitive wins in Q4 have never been stronger,” he said. “We continued to see strong momentum in all the key verticals.”

The company also said operating billings, a key metric it defines as the aggregate value of all invoices, jumped 56 percent, to $81.4 million, in the fourth quarter compared with a year ago.

Bearden called out overseas markets in Europe and Asia, which he said are about two years behind in adoption of Hadoop and related big-data management and analysis software that are Hortonworks’ foundational offerings. But he said there is now a “critical mass” of adopters. “Now is the time for us to engage in those markets and take advantage of that inflection point that’s formed,” he said.

Hortonworks took steps last summer to recover from a surprise revenue shortfall in its second quarter because of sales force issues. That situation improved last fall to produce a better-than-expected third quarter. In mid-January, it announced the appointment of industry veteran Rajnish Verma as its new president and chief operating officer, heading sales efforts along with other new regional sales executive. Verma took over from ex-President Herb Cunitz, who left in August after the disappointing sales.

The continuing losses reflect the difficulty in scaling up open-source software, which can be tougher both because it’s new and because it’s available from many other providers. Hortonworks isn’t alone in its challenges among big data companies, though. Large enterprises still report struggles installing big data systems such as those from Hortonworks, Cloudera Inc. and MapR Inc. because of rapid changes in big data open source software and a scarcity of engineers to run the systems.

There’s more competition, too, not just from new startups and rapidly evolving open-source technologies, but also from established players such as Amazon Web Services and Oracle Corp.

Photo by SiliconANGLE

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