Q3 FY2025 Earnings May 28, 2025 Safe Harbor Non-GAAP Financial Measures and Other Key Performance Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, this presentation includes the following non-GAAP financial and other key performance measures: non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income per share (diluted), free cash flow, Annual Recurring Revenue (or ARR), ...

Group 1 - The current market environment is characterized as a stock picker's market, with major indices rebounding sharply near year-to-date highs, suggesting a need for careful stock selection to prepare for a potential market correction [1] - The strategy recommended involves pruning out richly valued growth stocks, indicating a focus on value investing in the current climate [1] - The analyst, Gary Alexander, has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, which informs his insights into current industry trends [1] Group 2 - Gary Alexander has been a contributor to Seeking Alpha since 2017 and has been quoted in various web publications, indicating his established presence in the investment community [1] - His articles are syndicated to popular trading apps like Robinhood, which suggests a broad reach and influence among retail investors [1]

Core Insights - Nutanix reported revenue of $638.98 million for the quarter ended April 2025, marking a year-over-year increase of 21.8% and an EPS of $0.42 compared to $0.28 a year ago, exceeding the Zacks Consensus Estimate of $626.12 million by 2.06% [1] Financial Performance - Total Billings reached $647.05 million, below the average estimate of $676.02 million from four analysts [4] - Annual Recurring Revenue (ARR) was reported at $2.14 billion, slightly below the average estimate of $2.17 billion from four analysts [4] - Professional services billings were $18.48 million, significantly lower than the average estimate of $32.78 million from three analysts [4] - Subscription billings amounted to $627.25 million, surpassing the average estimate of $616.58 million from two analysts [4] - Other non-subscription product billings were $1.32 million, below the average estimate of $1.68 million from two analysts [4] Revenue Breakdown - Revenue from support, entitlements, and other services was $293.50 million, below the average estimate of $312.03 million from eight analysts, reflecting a year-over-year change of +9.1% [4] - Product revenue was $345.48 million, exceeding the average estimate of $310.26 million from eight analysts, representing a year-over-year increase of +35.2% [4] - Professional services revenue was $28 million, slightly below the average estimate of $28.12 million from seven analysts, with a year-over-year change of +6.7% [4] - Subscription revenue reached $609.66 million, above the average estimate of $594.37 million from seven analysts, indicating a year-over-year increase of +25.3% [4] - Non-portable software revenue was $0.50 million, significantly below the average estimate of $2.59 million from seven analysts, showing a drastic year-over-year decline of -95.5% [4] Stock Performance - Nutanix shares have returned +15.3% over the past month, outperforming the Zacks S&P 500 composite's +7.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Group 1 - Nutanix reported quarterly earnings of $0.42 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, and showing an increase from $0.28 per share a year ago, representing an earnings surprise of 10.53% [1] - The company achieved revenues of $638.98 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 2.06%, and up from $524.58 million year-over-year [2] - Nutanix has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Group 2 - The stock has increased approximately 29.1% since the beginning of the year, significantly outperforming the S&P 500's gain of 0.7% [3] - The future performance of Nutanix shares will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $638.41 million, and for the current fiscal year, it is $1.62 on revenues of $2.51 billion [7] Group 3 - The Computers - IT Services industry, to which Nutanix belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Nutanix's stock performance [5]

Financial Data and Key Metrics Changes - The company reported quarterly revenue of $639 million, exceeding the guided range of $620 million to $630 million, representing a year-over-year growth rate of 22% [14][15] - Annual Recurring Revenue (ARR) at the end of Q3 was $2.14 billion, reflecting an 18% year-over-year growth [15] - Non-GAAP gross margin in Q3 was 88.2%, and non-GAAP operating margin was 21.5%, higher than the guided range of 17% to 18% [16] - Non-GAAP net income in Q3 was $125 million, translating to a fully diluted EPS of $0.42 per share [17] - Free cash flow in Q3 was $203 million, representing a free cash flow margin of 32% [18] - The company ended Q3 with cash, cash equivalents, and short-term investments of $1.882 billion, up from $1.743 billion at the end of Q2 [19] Business Line Data and Key Metrics Changes - The company experienced strong new logo growth across all customer segments, with significant wins in the EMEA region and North America [9][10] - The net dollar-based retention rate (NRR) at the end of Q3 was 110%, remaining flat quarter-over-quarter [16] - Average contract duration was 3.1 years, slightly higher than expectations and up slightly quarter-over-quarter [16] Market Data and Key Metrics Changes - The company noted a dynamic macro environment affecting deal cycles, particularly in the federal business, leading to longer deal cycles and variability [26][30] - The company is optimistic about the federal business benefiting from its platform's focus on modernization and total cost of ownership [26] Company Strategy and Development Direction - The company aims to become the leading platform for running applications and managing data anywhere, focusing on hybrid multi-cloud capabilities and partnerships [13] - Recent partnerships with Dell and Pure Storage are expected to enhance the company's offerings, with new solutions being introduced [12][63] - The company is expanding its cloud platform to support Google Cloud and announced a new solution, Cloud Native AOS, to enable modern applications [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment remaining similar to Q3, with expectations to continue adding new customers [21] - The company plans to increase investments in sales, marketing, and research and development to address market opportunities [21] - Management acknowledged the challenges of year-over-year comparisons for new logo additions in Q4 due to strong performance in the previous year [21] Other Important Information - The company repurchased $38 million worth of common stock under its existing share repurchase authorization [19] - The updated guidance for fiscal year 2025 includes revenue of $2.52 billion to $2.53 billion, representing a year-over-year growth of approximately 17.5% [20] Q&A Session Summary Question: Can you walk us through the linearity seen throughout the quarter? - Management noted that while linearity can vary, they have not seen significant changes in deal cycles, although some variability exists in the federal business [30][31] Question: What is the delta between NCIC and the core standard NCI license? - The NCIC offering includes the platform minus the storage, and early customer feedback has been positive [36][39] Question: What is driving the increase in operating margin guidance? - The increase is attributed to timing of hiring and expected ramp-up in investments in Q4 [41][42] Question: Can you explain the difference between ARR and revenue growth rates? - Revenue is a flow metric while ARR is a stock metric, and factors like contract duration can affect their relative growth rates [50][51] Question: How is the pricing environment and share gains versus VMware? - The pricing environment has been stable, and the company has seen strong traction in acquiring new customers, particularly with its hypervisor [75][72] Question: What is the status of partnerships with Dell and Cisco? - Cisco has been a consistent contributor to new logo growth, while the Dell partnership is still in early stages but expected to ramp up [61][63]

Financial Data and Key Metrics Changes - The company reported quarterly revenue of $639 million, exceeding the guided range of $620 million to $630 million, representing a year-over-year growth rate of 22% [14][15] - Annual Recurring Revenue (ARR) at the end of Q3 was $2.14 billion, reflecting an 18% year-over-year growth [15][18] - Non-GAAP gross margin in Q3 was 88.2%, and non-GAAP operating margin was 21.5%, higher than the guided range of 17% to 18% [16][18] - Non-GAAP net income in Q3 was $125 million, translating to a fully diluted EPS of $0.42 per share [17][18] - Free cash flow in Q3 was $203 million, representing a free cash flow margin of 32% [18] Business Line Data and Key Metrics Changes - The company experienced strong new logo growth across all customer segments, with significant wins in large organizations modernizing their IT infrastructure [9][10] - The average contract duration increased to 3.1 years, slightly higher than expectations [16] - The net dollar-based retention rate (NRR) at the end of Q3 was 110%, remaining flat quarter-over-quarter [16] Market Data and Key Metrics Changes - The company noted strong demand for its solutions, particularly in the federal business, despite longer deal cycles due to changes in the federal government [26][27] - The company is optimistic about opportunities in the federal sector, focusing on modernization and total cost of ownership (TCO) improvements [26] Company Strategy and Development Direction - The company aims to become the leading platform for running applications and managing data anywhere, focusing on hybrid multi-cloud capabilities and partnerships [12][13] - Recent partnerships with Dell and Pure Storage are expected to enhance the company's offerings and market reach [12][63] - The company is expanding its cloud platform to support Google Cloud and announced new solutions to enable modern applications [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a dynamic macro environment affecting deal cycles and customer engagement but remains optimistic about continued demand for their solutions [25][26] - The company expects to continue adding new customers while noting that Q4 presents a tough year-over-year comparison for new logo additions [21] - Management raised full-year guidance across all metrics, reflecting confidence in sustained growth and profitability [22][20] Other Important Information - The company repurchased $38 million worth of common stock during Q3 and used approximately $65 million to retire shares related to employee tax liabilities [19] - The updated guidance for fiscal year 2025 includes revenue of $2.52 billion to $2.53 billion, representing a year-over-year growth of approximately 17.5% [20] Q&A Session Summary Question: Can you walk us through the linearity seen throughout the quarter? - Management noted that while linearity can vary, they have not seen significant changes in deal cycles, although some variability exists in the federal business [30][31] Question: What is the delta between NCIC and the core standard NCI license? - The NCIC offering includes the platform minus the storage, and early customer feedback has been positive [39] Question: What is driving the increase in operating margin guidance? - The increase is attributed to timing of hiring and expected productivity improvements, along with prudent investments in areas with anticipated returns [41][45] Question: How did the renewals business perform versus land and expand? - The company saw strong new logo growth and solid renewals in Q3, with a greater mix of larger deals in the pipeline [78][79] Question: What is the pricing environment like? - The pricing environment has been stable, with no significant changes noted, and the company continues to see traction in new customer acquisitions [74][75] Question: How is the company addressing the competitive landscape, particularly with VMware? - The company is gaining traction with new customers, many of whom are adopting their hypervisor, and is optimistic about opportunities arising from VMware's changes [72][74]

Financial Data and Key Metrics Changes - The company reported quarterly revenue of $639 million, exceeding the guided range of $620 million to $630 million, representing a year-over-year growth rate of 22% [13] - Annual Recurring Revenue (ARR) at the end of Q3 was $2.14 billion, reflecting an 18% year-over-year growth [6][13] - Non-GAAP gross margin in Q3 was 88.2%, and non-GAAP operating margin was 21.5%, higher than the guided range of 17% to 18% [14] - Non-GAAP net income in Q3 was $125 million, translating to a fully diluted EPS of $0.42 per share [15] - Free cash flow in Q3 was $203 million, representing a free cash flow margin of 32% [16] Business Line Data and Key Metrics Changes - The company experienced strong new logo growth across all customer segments, with significant wins in the EMEA region and North America [7][9] - The net dollar-based retention rate (NRR) at the end of Q3 was 110%, remaining flat quarter-over-quarter [14] - Average contract duration increased to 3.1 years, slightly higher than expectations [14] Market Data and Key Metrics Changes - The company noted a dynamic macroeconomic environment affecting deal cycles, particularly in the federal business sector [25][30] - The company is optimistic about opportunities in the federal business, focusing on modernization and total cost of ownership (TCO) improvements [25] Company Strategy and Development Direction - The company aims to become the leading platform for running applications and managing data anywhere, focusing on hybrid multi-cloud capabilities and partnerships [12] - Recent product announcements include support for Google Cloud and enhancements to the Nutanix Cloud Platform, indicating a commitment to innovation [11] - The company is expanding its partner ecosystem, particularly with Dell and Cisco, to drive new logo growth and market penetration [62] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic uncertainties but expressed confidence in continued demand for their solutions [30][88] - The company expects to maintain strong performance in Q4, with guidance for revenue between $635 million and $645 million [17][18] - Management highlighted the importance of investing in sales, marketing, and R&D to capture market opportunities [19] Other Important Information - The company repurchased $38 million worth of common stock during Q3 [17] - The updated guidance for fiscal year 2025 includes revenue of $2.52 billion to $2.53 billion, representing a year-over-year growth of approximately 17.5% [18] Q&A Session Summary Question: Can you walk us through the linearity seen throughout the quarter? - Management noted that while linearity can vary, they have not seen significant changes in deal cycles, although some variability exists in the federal business [29][30] Question: What is the delta between NCIC and the core standard NCI license? - The NCIC offering includes the platform minus the storage, and early customer feedback has been positive [36][39] Question: What is driving the increase in operating margin guidance? - The increase is attributed to timing of hiring and expected investments in sales and marketing, with a focus on sustainable growth [41][44] Question: Can you explain the difference between ARR and revenue growth rates? - Revenue is a flow metric while ARR is a stock metric, and various factors such as contract duration can affect their relative growth rates [50][52] Question: How is the company performing against VMware in terms of share gains? - The company is seeing strong traction with new customers, particularly those adopting their hypervisor, indicating competitive wins against VMware [74][76] Question: What is the outlook for partnerships with Dell and Cisco? - The company continues to expand its partner ecosystem, with Cisco contributing steadily to new logo growth and Dell's PowerFlex solution just entering the market [62][108]

Financial Performance - Nutanix reported an 18% year-over-year growth in Annual Recurring Revenue (ARR), reaching $2.14 billion compared to $1.82 billion in the previous year[3]. - Total revenue for Q3 FY'25 was $639.0 million, representing a 22% increase from $524.6 million in Q3 FY'24[3]. - GAAP operating income improved to $48.6 million from a loss of $11.6 million year-over-year, marking a $60.2 million increase[3]. - Non-GAAP operating income rose to $137.1 million, up $63.8 million from $73.3 million in the same quarter last year[3]. - Free cash flow for the third quarter was $203.4 million, significantly higher than $78.3 million in Q3 FY'24, an increase of $125.1 million[3]. - Total revenue for the three months ended April 30, 2025, was $638,983,000, representing a 21.7% increase from $524,577,000 in the same period of 2024[21]. - Total revenue for the nine months ended April 30, 2025, reached $1,884,660,000, up 17.7% from $1,600,864,000 in the prior year[21]. - Gross profit for the three months ended April 30, 2025, was $555,992,000, compared to $444,958,000 for the same period in 2024, indicating a 24.9% increase[21]. - Total billings for the three months ended April 30, 2025, were $647,045,000, compared to $557,285,000 in the same period of 2024, reflecting a 16.1% increase[28]. - Total revenue for the nine months ended April 30, 2024, was $1.60 billion, compared to $1.88 billion for the same period in 2025, indicating a year-over-year increase of about 17.7%[30]. - Gross profit for the nine months ended April 30, 2025, was $1,633,711,000, with a gross margin of 86.7%[40]. - Net income for the nine months ended April 30, 2025, was $149,716,000, with diluted net income per share of $0.52[40]. Revenue Breakdown - Subscription revenue for the three months ended April 30, 2024, was $486.62 million, an increase from $609.66 million for the same period in 2025, representing a growth of approximately 25.2%[30]. - Subscription billings for the three months ended April 30, 2024, were $515.92 million, increasing to $627.25 million for the same period in 2025, representing a growth of approximately 21.6%[30]. - Professional services revenue for the three months ended April 30, 2024, was $26.24 million, compared to $28.00 million for the same period in 2025, showing a slight increase of approximately 6.7%[30]. - Other non-subscription product revenue for the three months ended April 30, 2024, was $11.72 million, significantly decreasing to $1.32 million for the same period in 2025, indicating a decline of approximately 88.7%[30]. Cash Flow and Expenses - Cash provided by operating activities for the nine months ended April 30, 2025, was $601,927,000, compared to $428,234,000 in the same period of 2024[25]. - Total operating expenses for the nine months ended April 30, 2025, were $1,492,378,000, resulting in an operating margin of 7.5%[40]. - Research and development expenses totaled $471,596, with a reduction of $117,664 compared to previous periods[46]. - Sales and marketing expenses were $717,926, reflecting a decrease of $61,110[46]. Future Projections - The company expects fourth quarter revenue to be between $635 million and $645 million, with a non-GAAP operating margin projected between 15.5% and 16.5%[5]. - For the full fiscal year 2025, Nutanix anticipates revenue between $2.52 billion and $2.53 billion, with a non-GAAP operating margin of approximately 20.5%[6]. - The company plans to use a long-term projected non-GAAP tax rate of 20% starting in fiscal 2025[48]. Stockholder Information - Total current liabilities decreased to $1,244,341,000 from $1,281,555,000 year-over-year[20]. - Total assets as of April 30, 2025, were $3,096,630,000, down from $2,143,918,000 in the previous year[20]. - Stockholders' deficit improved slightly to $(711,434,000) from $(728,148,000) year-over-year[20]. - The company reported a total stock-based compensation expense of $266,419,000 for the nine months ended April 30, 2025[25]. - The company included 56,094 potentially dilutive shares related to convertible senior notes and employee equity incentive plans[46]. Operational Highlights - Nutanix announced the general availability of Nutanix Cloud Infrastructure (NCI) for external storage, enhancing its cloud platform capabilities[4]. - A partnership with Pure Storage was established to deliver integrated solutions for mission-critical workloads, particularly in AI applications[4]. - The average contract duration increased to 3.1 years from 3.0 years, indicating a slight extension in customer commitments[3].

  Delivers Outperformance Across All Guided Metrics Reports 18% YoY ARR Growth and Strong Free Cash Flow SAN JOSE, Calif., May 28, 2025 (GLOBE NEWSWIRE) -- Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced financial results for its third quarter ended April 30, 2025. “We delivered solid third quarter results, above the high end of our guided ranges, driven by the strength of the Nutanix Cloud Platform and demand from businesses looking for a trusted long-term partner,” s ...

Core Insights - Nutanix is set to report earnings on May 28, 2025, with historical data indicating notable stock volatility following earnings announcements [1][2] - Analysts expect Nutanix to announce earnings of $0.38 per share on revenues of $627 million, compared to $0.28 per share on revenues of $525 million in the same quarter last year [2] - Nutanix has a market capitalization of $21 billion and generated $2.3 billion in revenue over the past twelve months, achieving operational profitability with $69 million in operating profits despite a net loss of $55 million [2] Historical Performance - Over the last five years, Nutanix has recorded positive one-day returns in approximately 60% of instances following earnings announcements, with a median positive return of 9.9% and a maximum increase of 29.2% [1][5] - The percentage of positive one-day returns rises to 73% when analyzing data from the last three years [5] - There have been 20 earnings data points documented over the last five years, with 12 positive and 8 negative one-day returns observed [5] Post-Earnings Strategy - Traders can analyze the correlation between short-term and medium-term returns after earnings to guide trading strategies, particularly focusing on pairs with the highest correlation [3][4] - A comparatively lower-risk approach involves assessing historical probabilities and establishing a position before the earnings announcement [4] - Peer performance can impact post-earnings stock reactions, with historical insights indicating that pricing may begin even before earnings are revealed [6]