hortonworks, inc. (hdp) · 2018. 5. 9. · isv services *not yet available, coming soon extensible...

1 © Hortonworks, Inc. 2011 – 2016. All Rights Reserved.

HORTONWORKS, INC. (HDP)GLOBALLY MANAGE, SECURE AND GOVERN ACROSS ALL DATA ASSETS

Q1 2018 Investor PresentationMay 8, 2018


Safe Harbor StatementThis presentation is neither an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer,solicitation or sale is unlawful.

This presentation contains statements that are forward‐looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the SecuritiesExchange Act of 1934, as amended, including, without limitation, statements regarding strategic growth drivers, market opportunity, and our or our management’s expectations, hopes, beliefs,intentions or strategies regarding the future, including our long‐term financial model, revenue mix goals and anticipated future offerings. These forward‐looking statements are based on ourcurrent expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we haveanticipated. These forward‐looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results orperformance to be materially different from those expressed or implied by these forward‐looking statements. These risks and uncertainties include, but are not limited to, the following: ourhistory of losses and limited operating history; our lack of history with our support subscription models or other pricing models; our ability to penetrate the existing market for datamanagement solutions; our ability to maintain successful relationships with our partners; our ability to effectively compete; the ability of our offerings to operate with third‐party products andservices, including those of our partners; the continued development of open source technologies; and continued demand for our offerings. Should one or more of these risks or uncertaintiesmaterialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those in these forward‐looking statements. All forward‐looking statements aremade as of the date hereof based on information available to us as of the date hereof, and we undertake no obligation to publicly update or revise any forward‐looking statements.

Customers who purchase our offerings should make sure their purchasing decisions are based on features that are currently available. Please be advised that any unreleased offerings orfeatures referenced in this presentation or other public statements are not currently available and may not be delivered on time or at all.

This presentation includes both GAAP and Non‐GAAP financial measures. We believe certain Non‐GAAP measures are helpful in understanding our past financial performance and our futureresults. Non‐GAAP financial measures used in this presentation are not meant to be a substitute for comparable GAAP measures and are not intended to be considered in isolation from, insubstitute for, or superior to our GAAP results. Reconciliation of GAAP to Non‐GAAP measures may be found in the financial tables in our Press Release dated May 8, 2018, available on theInvestor Relations page at www.hortonworks.com.

Throughout this presentation, we have rounded numbers as appropriate.


The New Way of Business Is Fueled by Connected Data

• Connected customers, vehicles, devices

• Socially crowd‐sourced requirements

• Digital design and analysis

• Digital prototypes and tests (simulations)

• Connected factories, sensors, devices

• Human‐robotic interaction

• 3D‐printing on demand

• Connected trucks, inventory

• Location, traffic, weather‐aware distribution

• Real‐time inventory visibility

• Dynamic rerouting

• Connected customers, devices

• Omni‐channel demand sensing

• Real‐time recommendations

• Connected assets• Remote service monitoring and delivery

• Predictive maintenance• Over the air (OTA) updates

DEVELOPMENT MANUFACTURING DISTRIBUTION MARKETING/SALES SERVICE


The Winning Hand: Master the Perfect Storm of Tech and Consumer Trends

Artificial Intelligence

Cloud Computing

Internet of Things (IoT) and Stream

Processing

Search & Recommendations

FrictionlessServices

ImmersiveAmbient


The Hortonworks OpportunityAt the core of ~$1.8T in market opportunity over the next 5 years

Cloud~$303 B

Streaming~$1.65 B

Data Science~$180 B

Big Data~$210 B

IoT~$1.1 T

1.0 2.0 3.0

5 © Hortonworks, Inc. 2011 – 2018. All Rights Reserved

Sources: IDC Worldwide Big Data and Analytics Software Forecast, 2017‐2021, Forecasts Continuous/Streaming Analytics revenue to be $1.65B by 2021, July, 2017; Data Science Platform market size to reach $183.7B by 2023, Allied Market Research, Data Science Platform Market by Type and End User: Global Opportunity and Forecast, 2017‐2023; IDC Worldwide Semiannual Big Data and Analytics Spending Guide Update, Forecasts Big Data & Business Analytics revenues to be $210B by 2020, Press Release March 2017; Gartner Worldwide Public Cloud Services Revenue, Forecasts Public Cloud Services Revenue to be $302.5B by 2021, Press Release April 2018; IDC Worldwide Semiannual IoT Spending Guide Update, Forecasts Worldwide IoT Spending forecast to be ~$1.1T by 2021, Press Release December 2017.


Our Mission to BUILD AND EXTEND the Foundation Continues…

Make Hadoop an enterprise viable data platform Bring all data under management: all sources, all types, all tiers Manage entire lifecycle of data Enable a modern data architecture Process half of the world’s data


DATA‐AT‐REST HADOOP 1.0100% Open

YARN HADOOP 2.0Enable multiple workloads

DATA‐IN‐MOTIONHDP & HDFOut to the edge

CONNECTED DATA PLATFORMSCloud/On‐Prem

Performance and cost control

Hortonworks 3.0

HDP IPODec 2014First open source software IPO in 10 years

Inno

vatio

n

Hortonworks 1.0Hadoop as an enterprise viable data platform

A CONTINUOUS TRACK RECORD OF BUILDING AND INNOVATING

Fastest Enterprise Software Companyto $100M in Revenue1

Hortonworks 2.0Bring this to the edge with connected data platforms

Ecosystem Consolidation

2011 2013 2015

2016

2017

2018Hortonworks DataPlane Service

1 Source: Barclays Big Data Data Report, July 10, 2015


MULTIPLE CLUSTERS AND SOURCES

MULTIHYBRID

HORTONWORKS DATAPLANE SERVICE (DPS)MANAGE, GOVERN, SECURE

DATALIFECYCLEMANAGER

ISVSERVICES

*not yet available, coming soon

EXTENSIBLE SERVICES

IBM DSX*CLOUD‐BREAK*

DATAANALYTICSSTUDIO*

CONNECTED DATA PLATFORMS

HORTONWORKSDATA PLATFORM (HDP®)DATA‐AT‐REST

HORTONWORKSDATAFLOW (HDF™)DATA‐IN‐MOTION

MODERN DATA USE CASESEDW

OPTIMIZATION CYBER SECURITY DATA SCIENCE ADVANCEDANALYTICS

PARTNERSOLUTIONS

IOT/ STREAMING ANALYTICS

HORTONWORKSCONNECTION

ENTERPRISE SUPPORT

PREMIER SUPPORT

EDUCATIONAL SERVICES

PROFESSIONAL SERVICES

COMMUNITY CONNECTION

HORTONWORKSPLATFORM SERVICES

OPERATIONAL SERVICES

SMARTSENSE™

Global Data Management with Hortonworks

DATASTEWARDSTUDIO


Hortonworks Connection Ensures Success of Your Big Data Journey

Hortonworks Subscription, SmartSense, Community Connection and Services

Operational Excellence with SmartSenseHortonworks SmartSense delivers proactive support through cluster instrumentation and analytics.

Aligned to Customer RequirementsAdvisory boards, center of excellence implementations, digital assets, professional services and training to support customer success.

Annual Subscription Relationship Aligned to modern consumption trends, delivering support and maintenance of mission critical infrastructure.

Flex Subscription Relationship Universal, usage‐based support subscription, both cloud and on‐premises.

HortonworksConnection


Hortonworks Nourishes the Community and Ecosystem

HORTONWOR K S COMMUN I T Y C ONN E C T I O N

HOR TONWOR K S PA R T N E RWOR K S

Community Q&A resources Articles and code repos Community of Big Data

developers

Non‐profit committed to simplification & standardization of the Big Data ecosystem

Advance Apache™ Hadoop® with a common reference specification called ODPi core

Enables more Big Data apps Bringing advanced standardized

governance to market

World class partner program Network of ~2,300 partners

(ISVs, IHVs, SIs, etc.) providing best‐in‐class modern data solutions

HADOOP & B I G DATA E CO S Y S T EM


Open Source Approaches Drive Rapid Change and Transformation

MA X IMUM C OMMUN I T Y I N N OVAT I O N

T H E I N N O VAT I O N A D VA N TA G E

P RO P R I E TA R Y H A DOO P

T IM EIN

NOVATIO

N

O P E N COMMUN I T Y

Minimizes Riskof vendor lock‐in by delivering100% Apache open source technology

Maximizes Community Innovationwith hundreds of developers across hundreds of companies

Integrates Seamlesslythrough committed co‐engineering partnerships with other leading technologies


Financials

Retail, Food & Beverages

Technology, Media & Telecom

Automotive &Industrials

~70% of theUS F100

~60% of theUS F100

~70% of theUS F100

~80% of theUS F100

Hortonworks Customers Achieve Value inEvery Industry

Learn more at hortonworks.com/customers


Significant Cohort1 GrowthCohort Multiple

Cohort multiple2 expansion by quarter

1.21.5

1.9

2.7

3.3

3.84.2

5.2

6.0

6.6

7.1

8.6

‐

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Q+1 Q+2 Q+3 Q+4 Q+5 Q+6 Q+7 Q+8 Q+9 Q+10 Q+11 Q+12

8.6X

1 A cohort class is a group of new logo customers in a given quarter. 2 The cohort multiple is the average growth of the subscription contract value for all cohort groups in one quarter as compared to the prior quarter.


$ 27.6 $ 31.0 $ 32.5

$ 35.6

$ 42.1 $ 45.8

$ 53.2 $ 57.8

$ 61.5

$ 13.7 $ 12.6

$ 15.1

$ 16.4

$ 13.9

$ 16.0

$ 15.8

$ 17.2

$ 17.5

$41.3 $43.6$47.5

$52.0$56.0

$61.8

$69.0$75.0

$79.1

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2016

Significant Revenue Growth and MomentumQuarterly GAAP Revenue ($mil)

2017

Q1 2018/Q1 2017 Subscription GAAP Revenue Growth:

46% YoY

Support Subscription GAAP Revenue Professional Services GAAP Revenue

2018


Financial Highlights Subscription‐Based Model • $249.5 million of total contract liabilities1 as of March 31, 2018

Strong Growth and Cash Position

Rapidly Expanding Subscription Customer Base

Land and Expand Growth Strategy

• Record quarterly GAAP revenue, grew 41% year‐over‐year in Q1 2018 to $79.1million

• $89.4 million of cash and investments2 as of March 31, 2018• Over 1,400 support subscription customers including over 60% of Fortune 100 and

nearly 30% of Fortune Global 500 companies• Approximately 2,300 partners in the Partnerworks program

• 10 deals >$1 million in Q1 2018, 5 of which included HDF, showing continuedadoption of this technology, and 5 of which were with international customers

• 52 total deals >$1 million landed in the last twelve months• 59 customers with an annual recurring revenue (ARR) in excess of $1 million• Cohort multiple growth of 8.6X over a twelve quarter period• 120% dollar‐based net expansion rate (average for trailing four quarters)

Investing for Growth ~$1.8 trillion market opportunity3

Attractive Long‐Term Model

• Investing to capitalize on several mega‐trends driven by increased utilization ofartificial intelligence, machine learning, Big Data, the enterprise IoT and streaminganalytics, both on premises and in the cloud

• Driving to target 80% support subscription revenue mix• Achieved second consecutive quarter of positive operating cash flow, with $8.0

million in the first quarter of 20181 Total contract liabilities is comprised of short‐term deferred revenue, other contract liabilities and long‐term deferred revenue.2 Excludes access to an undrawn $50.0 million line‐of‐credit facility.3 See slide 5 for market size references.


ASC 605 to ASC 606 Adoption Main Changes

605 606

Multiple Element Arrangement(MEA) Allocation No VSOE Allocation via SSP

MEA approach Combined services As delivered

ResultRevenue recognition generally starts later and professional services are

recognized over a longer period of time

Revenue recognized as support and professional services are delivered

Commissions Expensed upfront Expensed over time


ASC 606 Contract Liabilities1 Adoption Impact

$0

$50

$100

$150

$200

$250

$300

12/31/2017<ASC 605>

1/1/2018<ASC 606>

3/31/2018<ASC 606>

‐$22.7 M

Deferred Revenue

Contract Liabilities

$275.2 M $252.5 M $249.5 M+ Q1 18 customer invoicing

– Q1 18 revenue

Contract Liabilities

1 Total contract liabilities is comprised of short‐term deferred revenue, other contract liabilities and long‐term deferred revenue. This is comparable to the deferred revenue category under ASC 605.

(in millions)


ASC 606 vs. ASC 605 Q1 2018

$79.1M

Total Revenue

Support Subscription Revenue

Professional Services Revenue

606605 605606

606 605 606 605 606 605

Sales & Marketing Expense

Operating Expenses

Operating Margin

$79.1M$61.5M $62.7M

$16.4M$17.5M

606 605

$48.9M $48.4M

$97.6M $97.1M

‐$40.8M ‐$40.3M


TRANSFORM BUSINESS MODELS

LEVERAGE THE VALUE OF DATA

EVERY BUSINESS IS A DATA BUSINESS

20

21 © Hortonworks, Inc. 2011 – 2018. All Rights Reserved

Nasdaq: HDPNasdaq: HDPReuben Gallegos

VP, Investor Relations and Corporate [email protected]

Reuben GallegosVP, Investor Relations and Corporate Development

[email protected]

Hortonworks, HDP, HDF, SmartSense, DataPlane Service, DPS, Data Steward Studio, Data Analytics Studio and Data Lifecycle Manager are registered trademarks or trademarks of Hortonworks, Inc. and its subsidiaries in the United States and other jurisdictions. For more information, please visit www.hortonworks.com. All other trademarks are the property of their respective owners.

hortonworks, inc. (hdp) · 2018. 5. 9. · isv services *not yet available, coming soon extensible...

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