Cloudera Inc.

Overview Key strengths Key risks Good revenue and cash flow visibility given that it derives 90% of its revenue from subscriptions, most of which it collects a year in advance. Operates in the big data and analytics software industry, which is fragmented between legacy and new cloud-based data management solutions. High net retention rates of about 108% due to its sticky client base and long tenured client relationships. High forecast leverage in the 7x range will limit rating upside over the next 12 months. Cloudera Data Platform (CDP) provides upselling opportunities. Significant cash call from restricted stock units (RSUs) and one-time costs will suppress free operating cash flow (FOCF) over the next year. We expect Cloudera Inc. to generate weak

...We expect Cloudera Inc. to generate weak FOCF and sustain elevated leverage over the next 12 months. The company's S&P Global Ratings-adjusted leverage remained elevated at 8.8x as of Jan. 31, 2022, though we expect it will deleverage to the high-7x area on increasing revenue over the next year, public company savings, and the elimination of one-time restructuring charges. Cloudera's material cash commitment to pay upwards of $120 million of RSUs in fiscal year 2023 (ending January 2023) will depress its FOCF generation. Specifically, we forecast FOCF generation of $40 million over the next fiscal year, which will improve to $130 million in fiscal year 2024 as these payments wind down. We believe the company will face remaining payments of about $70 million in fiscal year 2024. While these payouts will reduce its FOCF, we anticipate Cloudera will have sufficient liquidity to fund its operations, including $162 million of cash and $250 million of revolver availability as of January 2022....

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