Cloudera Inc.

Overview Key strengths Key risks Good revenue and cash flow visibility given that 90% of revenue is subscription based, 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. Well positioned to capture market share given its ability to be cloud agnostic and provide a heterogenous mix of deployments for data management in an open-source environment High forecasted leverage in the mid-7x area will limit rating upside over the next 12 months. Cloudera Data Platform (CDP) provides upselling opportunities. Weak free operating cash flow (FOCF) due to high RSU payments over the next year. Slower expansion within its established customer base,

...We expect weak macroeconomic trends will continue to suppress Cloudera's growth and net retention below historical patterns, although its long-term tailwinds remain robust. Slower expansion within its established customer base, Russian sanctions, and foreign exchange headwinds have caused a decline in the company's net retention rate to 102% in fiscal 2023 from 108% in fiscal 2022. Cloudera's decelerating growth trends have also been negatively impacted by longer sales cycles and more cautious budgeting by customers who have delayed or pulled back on spending on Cloudera's offerings to preserve profitability given macroeconomic uncertainty. Implementing or expanding upon a firm's data analytics capabilities requires large investments and resources across the entire firm, which increases the upselling and cross selling hurdles for Cloudera, especially for large enterprise customers. We expect this slowdown will persist in 2023 and normalize in 2024 and revenue to grow about 5% in 2023, below...

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