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Riding High: Hortonworks Inc.


Shares of big data company Hortonworks Inc. (HDP) have risen an impressive 61% year-to-date, clearly outperforming the broader market, and are up over 100% from the lows of around $6.42, recorded last October.

Before we go into specifics of Hortonworks, here's what big data means in a nutshell...

Big data refers to a process that is used when traditional data mining and handling techniques cannot uncover the insights and meaning of the underlying data. Data that is unstructured or time sensitive or simply very large cannot be processed by relational database engines. (Source: Techopedia).

Hortonworks uses open source software platforms such as Apache Hadoop, NiFi, and Spark for distributed storage and distributed processing of very large data sets on computer clusters.

The Company has over 1,000 support subscription customers spread across different lines of business such as technology, pharma, health care, energy and railways, to name a few. Revenue is derived by way of customer fees for support subscription offerings and professional services.

More than half of the Fortune 100 and over a quarter of the Fortune Global 500 companies are Hortonworks' customers.

Hortonworks continues to gain traction in its business as more customers go about deploying open source solutions into their next generation enterprise data architecture, which is currently being impacted by Cloud Computing, IoT and Big Data.

The following financial data is proof of the Company's growing sales momentum.

 Metrics  2014  2015  2016 
Revenue$46Mln $121.9Mln $184.5Mln 
Net loss$177Mln $179Mln $251.7Mln 
Loss/Share$24.16 $4.13 $4.40 
Gross profit (Loss)($34.8Mln) $66.8Mln $112.3Mln 
Operating billings$87Mln$165.9Mln$269.9Mln

*Operating billings is an operating measure representing the collective value of customer invoices.

In the first quarter ended March 31, 2017, net loss narrowed to $54.8 million or $0.89 per share on total support subscription and professional services revenue of $55.97 million. This compares with a net loss of $65.75 million or $1.26 per share and revenue of $41.3 million in the year-ago quarter.

Gross profit for the quarter was $38 million, up from $24.98 million in the year-ago quarter.

In the first quarter of 2017, the Company executed 12 deals with a contract value greater than $1 million dollars, which is almost twice the number in the year-ago quarter, according to the Company.

Given the fact that the number of large enterprises continuing to adopt Hortonworks' platforms, services and solutions has been on the rise, the Company is optimistic about its future.

Hortonworks expects total revenue of $57.0 million for the second quarter of 2017, which represents a potential growth of over 30% compared to the second quarter of 2016.

Looking ahead to full-year 2017, the Company foresees revenue between $235.0 million and $240.0 million, reflecting 27% to 30% potential growth over 2016.

The Company has a strong balance sheet - having zero debt, total cash of $83.4 million and access to another $30.0 million revolving credit facility that has been put in place to provide flexibility in managing working capital.

Although uniquely positioned at the intersection of three megatrends namely, cloud computing, Internet-of-Things and big data, which are dramatically impacting enterprise data architectures, Hortonworks is not being complacent.

The Company plans to further leverage its existing R&D investments for utilization across other data-intensive technology trends like Artificial Intelligence and Machine Learning where excitement and interest has grown significantly.

Shares of Hortonworks have traded in a range of $6.42 to $13.56 over the last 1 year. The stock closed Friday's (May 12) trading at $13.42, up 6.93%.

by RTTNews Staff Writer

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