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Hortonworks losses deepen despite growth in subscription sales

Unprofitable firm still down on market expectations

Operating losses at Hadoop-flinger Hortonworks deepened to $64.3m (£49.3m), compared to a loss of $42.9m (£32.9m) during the second quarter last year. It's not looking good for Big Data.

Revenue at the firm, however, increased by 46 per cent to $43.6m (£33.4m) for its second quarter of fiscal year 2016, compared with the same period last year.

In a conference call, analysts noted Hortonworks was behind its previous guidance on what it expected its results to be for the quarter. Rob Bearden, Hortonworks' chief exec, said some workers had been laid off this quarter as the company shifts its sales model.

The big data flinger also announced the departure of its president, Herb Cunitz.

Bearden said he had been a "terrific partner" over the last four years.

"I’m very sorry to see him go. But Herb is very focused and committed to becoming a CEO and he’s emerged into the skill set to be and prepared to do that. And this is a good transition point for him to go take a period of time off. He’s going to be in transition mode here for a bit longer. And then he will start his search for a CEO job and I’ll tell you he’s ready for it, and very proud of the team he’s built and the quality of the business that he’s run."

Bearden said Hortonworks' second quarter demonstrated strong subscription revenue growth and "a material improvement in operating cash flow," adding: "We remain focused on transforming our enterprise customers' business models while also improving our own business model."

A sizeable portion of Hortonworks' time is taken up with professional services work, rather than a lower cost customer self-service model. Bearden has previously told The Register that is something the business is unsurprisingly keen to shed.

For the full year Hortonworks said it currently estimates revenue will be $177m (£135.7m), up from $121.9m (£93m) for its full-year 2015.

The biz currently reckons it will be no closer to turning a profit. Earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to be a negative $61.2m (£46.9m) which it said "includes the negative impact of the $5.9m (£4.5m) deferred revenue reserve established in the second quarter of 2016."

However, that is an improvement on last year, when it recorded negative EBITDA of $85.3m (£65.4m). ®

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