Hortonworks, Tableau Q1 Returns Show Big Data's Potential - InformationWeek

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5/10/2016
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Hortonworks, Tableau Q1 Returns Show Big Data's Potential

The BI company and the big data Hadoop company reported their first quarter results, providing an inside look into the emerging analytics and data software industry. Tableau said it sees slower spending in 2016, while Hortonworks reported nearly double the number of $1 million-plus deals.

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While many large companies such as Microsoft and IBM offer big data products and services, big data is just a piece of these giants' overall business. While there are plenty of smaller specialists in big data and analytics, many of them are still emerging companies that are privately held.

But there are a few emerging big data and analytics companies that are publicly held, and two of them reported their quarterly earnings last week, providing a window into the state of this subsection of the software industry. These companies' revenues are much smaller than software giants, and they operate at a loss, not a profit. Yet they are on the front lines of enterprise adoption of some of the leading-edge technologies in analytics and big data.

[Want to know why Amazon's most recent quarter quelled concerns? Read Amazon's First-Quarter Results Should Silence Critics.]

Data visualization software provider Tableau, and big data and Hadoop software distribution company Hortonworks both reported their quarterly earnings last week.

(Image: gong hangxu/iStockphoto)

(Image: gong hangxu/iStockphoto)

Tableau Software

This Seattle-based data visualization and business intelligence company beat analyst expectations for both revenue and net income for the first quarter. However, investors were disappointed by the company's forecast for the second quarter. The morning after the earnings announcement, the stock opened down more than $2 from its closing price of $50. Early this week it was trading at $46.

That may be because executives told analysts during the call that the IT spending environment right now is tight compared to recent years, and the environment is competitive.

"While we are encouraged by the demand for Tableau, there are slowing growth rates for IT spend this year," Christian Chabot, chairman and CEO told analysts during the call.

Tableau also told analysts during its earnings call last week that it has scaled back its hiring plans for the year to 500 to 600 new workers, compared to the 1,000 additional workers it had expected to hire in the original plan.

On the plus side, Tableau's CEO took the opportunity to promote the company's recently upgraded product, version 9.3, and the beta version of Tableau 10, which shipped a few weeks ago, to be generally available this summer.

Tableau also said that it added several big new customers in the quarter, including the Advertising Council, First Financial Bank, Hawaiian Airlines, Cellular One, Guess?, and Children International. In addition, Tableau said it expanded relationships with existing customers including Fifth Third Bank, Bloomberg, IKEA, Softbank, and Providence Health.

Tableau reported total revenue of $171.7 million for its first fiscal quarter ended March 31, representing a 32% increase over the $84.4 million reported for the same period a year ago. The company reported a net loss of $45.6 million compared with a net loss of $10 million for the same period a year ago. Tableau forecasted second quarter revenue in the range of $190 million to $195 million, noting that the high end of the range represented about 30% year-over-year growth. Tableau said revenue for the full year is expected in the range of $835 million to $855 million.

Hortonworks

Hortonworks is a smaller company than Tableau. It's also much farther away from hitting profitability. Yet smaller companies can usually post more impressive top-line growth that is attractive to investors. That was the case with Hortonworks' first quarter earnings, too. The company's stock opened 60 cents higher, at $13, the morning after its earnings announcement last week.

Hortonworks offers a full stack of big data technologies, including Hadoop and complementary software, along with professional services. The company reported total first-quarter revenue of $41 million, nearly double the $22 million it reported during the same quarter a year ago. Net loss grew to $66 million, compared with $41 million during the same quarter last year. While those numbers seem large, they are in line with this emerging company's historical performance.

CEO Rob Bearden told analysts that the company signed seven deals over $1 million in the first quarter, compared with four deals over $1 million the first quarter of last year.

Commenting on an analyst question about the typical projects that Hortonworks is seeing, Bearden said that it's a mix of both smaller proof-of-concept type projects and larger projects.

"It's a mixture of both, but accelerating," he said. "And when it's a smaller project, it tends to be a very compressed time frame. And they are very prescriptively and surgically enabling a use-case."

Bearden said these projects are moving faster and organizations are spending less time to prove their thesis for the use case than they did a year ago. Organizations are also showing a greater interest in data in motion than they did a year ago, Bearden said.

Jessica Davis has spent a career covering the intersection of business and technology at titles including IDG's Infoworld, Ziff Davis Enterprise's eWeek and Channel Insider, and Penton Technology's MSPmentor. She's passionate about the practical use of business intelligence, ... View Full Bio

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