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Cloudera Posts Upbeat Q2 Results, Privatization Deal on Track

Cloudera, Inc. (CLDR) reported stronger-than-expected Q2 results for Fiscal 2022, topping both earnings and revenue estimates driven by robust adoption of the company’s Cloudera Data Platform (CDP).

Shares of the enterprise data cloud company have gained over 20% over the past year. (See Cloudera stock charts on TipRanks)

Adjusted earnings of $0.15 per share grew 50% year-over-year and beat analysts’ expectations of $0.09 per share. The company reported earnings of $0.10 per share in the prior-year period.

To add to that, revenues jumped 10% year-over-year to $236.1 million and exceeded consensus estimates of $227.19 million. The increase in revenues reflected a surge in subscription revenue, which inched up 11% to $213.3 million. Furthermore, annualized recurring revenue (ARR) increased 13% to $832 million.

Notably, due to Cloudera’s ongoing privatization deal, the company refrained from issuing guidance for the third quarter and Fiscal 2022.

Update on Privatisation Deal with CD&R and KKR

Cloudera’s management announced that its shareholders have approved the proposed privatization deal with CD&R and KKR.

On June 1, Cloudera inked a deal with private equity firms Clayton, Dubilier & Rice, LLC (CD&R) and Kohlberg Kravis Roberts & Co. L.P. (KKR) to be acquired and taken private in an all-cash transaction worth $5.3 billion.

Per the terms of the deal, Cloudera shareholders will receive $16 per share. The deal is expected to complete during the second half of 2021, subject to certain mandatory approvals.

Upon completion, Cloudera will become a private company and its shares will cease to be listed in any stock market.

Sharing his optimism on the pending deal, Cloudera CEO Rob Bearden commented, “We are also pleased to announce that shareholders have approved our proposed transaction with CD&R and KKR, which we believe will accelerate our hybrid data cloud strategy and enable further investment in product innovation.”

Management Changes

Concurrent with the earnings announcement, the company announced management changes. Upon completion of the transaction with CD&R and KKR, current CFO Jim Frankola will transition to a newly created position of Strategic Advisor, while Kevin Cook, currently SVP of Finance, will take up as the CFO.

Additionally, Chief Product Officer, Arun Murthy, will depart Cloudera effective immediately.

Following the fiscal Q2 results, JMP Securities analyst Patrick Walravens reiterated a Hold rating on the stock.

Overall, the stock has a Hold consensus rating based on 4 unanimous Holds. The average Cloudera price target of $16 implies that shares are fully valued at current levels.

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