Cloudera Any thoughts...

Cloudera’s Q1 had negative growth and the market punished the stock. I believe they are still in secular growth phase and the growth will soon resume after the last Qtr reset. In the meantime they have strong balance sheet. The EV/S < 5, is inviting but change in strategy and negative growth are negatives.

Of course one can wait for the 2Q results to see the traction on the new strategy and whether revenue growth is resuming. Anyone has any thoughts?

SW appears to like Cloudera, but I find that it is much more profitable to buy winners instead of trying to find turnarounds, absent the turnaround being part of a FUD (fear uncertainty doubt) event.

At some point Cloudera will probably turn things around, but in the meantime the market goes on without it.

Tinker

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I find that it is much more profitable to buy winners instead of trying to find turnarounds, absent the turnaround being part of a FUD (fear uncertainty doubt) event.

I agree with turnarounds. Here are my thoughts…

FY 2018 they had great growth and could have continued the land grab with high SGA. They looked at the numbers and found they can have less churn, and better sales for the SGA $$ if they focus on the enterprise customers or the customers have that potential, which are existing ones. It is not like they are going to abandon the new logo, but emphasis is on existing clients, who has potential to grow.

So like any change in strategy the Q1 got hit by change of direction and had negative growth. They had no need to change that strategy, could have continued in the old path and will be growing nicely but they felt that is not going to take them to profitability.

We need to see how it is going to play out. Every company had to make a switch from going after growth to profitability. And it is not going to be without bumps.

Let us see what happens.

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From Q2 2019 results…

Recent Business and Financial Highlights

Subscription revenue was up 26% year-over-year to $93.1 million
Subscription revenue represented 84% of total revenue, up from 82% in the second quarter of fiscal 2018
Non-GAAP subscription gross margin for the quarter was 87%, up from 85% in the second quarter of fiscal 2018
Customers with annual recurring revenue greater than $100,000 were 568, up 30 for the quarter
Dollar-based net expansion rate was 128% for the quarter
Non-GAAP operating loss improved more than 16 percentage points in the second quarter compared to the year-ago period

The outlook for the third quarter of fiscal 2019, ending October 31, 2018, is:

Total revenue in the range of $113 million to $114 million, representing approximately 20% year-over-year growth
Subscription revenue in the range of $96 million to $97 million, representing approximately 24% year-over-year growth

I guess cloudera is back to growth

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Seems like good results… I have a small position thanks to selling put last quarter.

Will look further to see if there is higher growth expected in future…

SteppenWulf has been quite positive on this name.

BTW - HDP also reacted positively today due to CLDR pop

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