Hortonworks still burning cash, still aiming to become billion-dollar biz

Which is it then? Revenues up but operating losses hit $56m

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Hadoop-flinger Hortonworks continues to burn through cash, but boss Rob Bearden has said that the biz is on target to cut spending by the end of the year.

The latest results show the firm once again boosted its revenues, achieving a figure of $61.8m for the quarter ending June 30 – up 42 per cent on the same period in 2016. It is also up on revised estimates made at the end of last month, which had predicted revenue of $58m to $59m.

But the results show that the company, which went public in 2014, is still running a net operating loss.

Hortonworks recorded an overall operating loss of $56.1m – compared with $64.2m in Q2 of 2016, and $54.5m in Q1 of this year.

The company has insisted that it will reach operating cashflow breakeven by Q4 of this year, with Bearden telling analysts during the earnings call that they were on track to reach this target.

He said that the biz had "burned 50 million bucks" in the first half of 2016, compared with $20m in the first half of 2017, which he said showed a good improvement. This quarter, it has gone through $11.7m, and is aiming at a "burn in the low teens" in Q3 in order to get to the target of zero.

Bearden also pushed back against the rumblings of recent months about the future of the Hadoop market, saying that both it and the big data market more broadly "continue to accelerate and expand".

He was also quizzed about the impact of the sudden departure of Hortonworks' president and COO Raj Verma.

The Tibco veteran left the company at the end of July, just six months after he was brought on board to turn around the company’s fortunes. He was replaced by Scott Davidson, who has tacked the COO responsibilities to his existing job as CFO.

On the earnings call, Bearden told analysts that the "goal and mission is the exact same... driving [Hortonworks] to a billion-dollar" company and growing profitability.

Observers have told The Reg that Davidson's experience with the firm and its management is being viewed as a positive for the company's future profits, and Bearden described their relationship as being "joined at the hip".

The company also signed a potentially lucrative deal with IBM this quarter – something Bearden called "transformational".

Big Blue will adopt Hortonworks Data Platform for its Hadoop distribution – ditching its BigInsights distro – and Hortonworks adopting IBM's DSX data science platform.

BigInsight customers are being shifted over to Hortonworks, which will also involve them changing from IBM's perpetual licence, sold with software and support maintenance, to Hortonworks' subscription-based system.

This might cause some headaches for the Hortonworks team when it comes to predicting revenue for future quarters, as they are waiting until IBM's customers come up for maintenance renewal to switch.

"We're working with IBM to ensure that happens when customers want it to," Davidson said, adding that "with all perpetual licences, we can't say when they'll do it".

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