Nutanix (NTNX) Update Summary Company Overview - **Company**: Nutanix - **Date of Briefing**: June 13, 2025 - **Speakers**: Thomas Cornelli (SVP of Product Management), Dan Cerulli (Senior Director of Product Management) Key Points and Arguments Industry and Market Dynamics - Nutanix positions itself as a platform for all applications, data, and AI, emphasizing modernization of existing VM-based infrastructure and future readiness for hybrid multi-cloud environments [4][5][6] - The company has transitioned from an appliance vendor to a software subscription vendor, partnering with major OEMs like Dell, HPE, and Cisco [7][8] - The focus is on enterprise AI, which is expected to drive a complete rethink of customer infrastructure, emphasizing the need for container-based applications and Kubernetes [13][14][15] Product Offerings - Nutanix's portfolio includes the Nutanix Cloud Platform (NCP), which integrates various services including unified storage and database automation [70][72] - The introduction of NKP (Nutanix Kubernetes Platform) allows for container management and is designed to run on various infrastructures, including bare metal and public clouds [39][44][49] - NKP is characterized as open and complete, allowing deployment flexibility and avoiding vendor lock-in [74][75] Customer Success Stories - Colynx, a logistics company, successfully migrated to NKP to avoid high costs from Broadcom, demonstrating the platform's effectiveness in complex environments [48][49] - A European public health agency adopted NKP for managing multiple Kubernetes clusters across various locations, highlighting its scalability and open-source capabilities [50][52] Competitive Landscape - Nutanix differentiates itself from competitors like VMware and Red Hat by focusing on the needs of operators and providing a unified experience across VMs and containers [63][65] - The company emphasizes the complementary nature of VMs and containers, asserting that both will coexist in enterprise environments for the foreseeable future [78][80] Future Outlook - Nutanix plans to continue investing in Kubernetes and AI use cases, aiming to strengthen its market position and capture new revenue opportunities [59][89] - The company anticipates significant growth in Kubernetes adoption, with projections indicating that by 2029, 95% of organizations will run container applications in production [16][19] Additional Important Insights - The shift towards Kubernetes is seen as an opportunity rather than a threat to Nutanix's hyper-converged infrastructure (HCI) business, as it aligns with the company's vision of using software and servers to redefine infrastructure [95][98] - The integration of open-source technologies and a focus on enterprise capabilities are central to Nutanix's strategy, allowing customers to manage Kubernetes consistently across different environments [43][44] This summary encapsulates the key insights from the Nutanix update, highlighting the company's strategic direction, product innovations, and market positioning.

SAN JOSE, Calif., June 09, 2025 (GLOBE NEWSWIRE) -- Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced that it will host a webinar to discuss the cloud native capabilities of the Nutanix Cloud Platform, including Nutanix Kubernetes Platform, Nutanix Data Services for Kubernetes and Nutanix Enterprise AI. Speakers will include:Thomas Cornely, SVP, Product ManagementDan Ciruli, Sr. Director, Product Management No financial information will be discussed during the event. Dat ...

Group 1 - Nutanix (NASDAQ: NTNX) is currently trading around all-time highs, raising questions about its growth potential compared to investments made post-pandemic [1] - The stock has experienced a relatively quiet year, prompting investors to consider future growth opportunities [1] Group 2 - The analysis emphasizes the importance of understanding macroeconomic trends, corporate earnings, and financial statement analysis to uncover high-growth investment opportunities [1]

Core Insights - Nutanix's international operations are crucial for understanding its financial resilience and growth potential, especially in a global economy [2][3] Revenue Performance - The total revenue for Nutanix in the quarter was $638.98 million, reflecting a year-over-year increase of 21.8% [4] - International revenue breakdown shows mixed results, with Other Americas contributing $13.56 million (2.12%), which was a -27.66% surprise compared to expectations [5] - Asia Pacific generated $106.9 million (16.73%), falling short of the $112.49 million estimate by -4.97% [6] - Europe, the Middle East, and Africa accounted for $172.42 million (26.98%), exceeding expectations by +14.95% [7] Future Revenue Forecasts - Analysts project total revenue of $642.2 million for the current fiscal quarter, a 17.2% increase year-over-year, with contributions from Other Americas (3%), Asia Pacific (17.8%), and Europe, the Middle East, and Africa (23.7%) [8] - For the full year, total revenue is expected to reach $2.53 billion, a 17.6% increase from the previous year, with specific contributions from each region [9] Strategic Considerations - The reliance on global markets presents both opportunities and challenges for Nutanix, making the analysis of international revenue trends essential for forecasting future performance [10] - Analysts closely monitor these patterns due to the complexities of global interdependence and geopolitical factors [11]

Financial Performance - 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 the previous year[19] - Net income for the three months ended April 30, 2025, was $63,363,000, compared to a net loss of $15,616,000 in the same period last year, indicating a significant turnaround[21] - The company reported a gross profit of $555,992,000 for the three months ended April 30, 2025, which is a 25% increase from $444,958,000 in the prior year[19] - Total revenue for the nine months ended April 30, 2025, was $1,884,660,000, up from $1,600,864,000 in the same period of 2024, representing a growth of approximately 17.7%[43] - Net income for the nine months ended April 30, 2025, was $149,716,000, compared to $1,326,000 for the same period in 2024, indicating a significant increase[26] - Gross profit for the three months ended April 30, 2025, was $555,992,000, with a gross margin of 87.0%[141] - Non-GAAP gross profit for the nine months ended April 30, 2025, was $1,658.98 million, up from $1,386.25 million for the same period in 2024, reflecting a growth of 19.6%[163] Revenue Breakdown - Product revenue increased to $345,479,000 for the three months ended April 30, 2025, up from $255,465,000, marking a 35.3% growth year-over-year[19] - Subscription revenue for the nine months ended April 30, 2025, reached $1,794,777,000, compared to $1,498,081,000 in 2024, reflecting an increase of about 19.8%[43] - Subscription revenue for the three months ended April 30, 2025, was $609,663,000, accounting for the majority of total revenue[142] - Subscription revenue for the three months ended April 30, 2025, reached approximately $330.0 million, up from $231.8 million for the same period in 2024, representing a growth of 42.3%[148] - Support, entitlements, and other services revenue increased by approximately $24.4 million, or 9%, for the three months ended April 30, 2025, compared to the same period in 2024, due to a 10% growth in the end customer base[201] Expenses and Costs - Operating expenses for the three months ended April 30, 2025, totaled $507,347,000, up from $456,546,000, reflecting an 11.1% increase year-over-year[19] - The company reported stock-based compensation expenses of $83.998 million for the nine months ended April 30, 2024, compared to $85.969 million for the same period in the previous year, showing a slight decrease of 2.3%[23] - Sales and marketing expenses rose to $775,185 thousand for the nine months ended April 30, 2025, reflecting an increase of $57,259 thousand or 8% compared to the prior year[209] - The percentage of total revenue attributed to sales and marketing expenses was 44.8% for the nine months ended April 30, 2025, compared to 41.1% in the prior year[209] Cash Flow and Liquidity - Cash and cash equivalents decreased to $655,270,000 as of July 31, 2024, from $872,599,000 as of April 30, 2025, indicating a reduction in liquidity[17] - Net cash provided by operating activities for the nine months ended April 30, 2025, was $601,927,000, compared to $428,234,000 for the same period in 2024, showing a growth of approximately 40.5%[26] - Cash, cash equivalents, and restricted cash at the end of the period on April 30, 2025, totaled $872,626,000, up from $600,158,000 at the end of the previous period, marking an increase of about 45.2%[26] Shareholder Information - Nutanix issued 3,274 thousand shares through employee equity incentive plans, contributing $547 thousand to paid-in capital during the nine months ended April 30, 2024[23] - The company repurchased approximately 0.6 million and 0.9 million shares of Class A common stock during the three and nine months ended April 30, 2025, for an aggregate purchase price of approximately $37.5 million and $57.5 million, respectively[107] - As of April 30, 2025, approximately $161.4 million remained available for future share repurchases under the Board's authorization[107] Strategic Initiatives - The company plans to continue investing in research and development to enhance its solutions and expand its product offerings, particularly in generative artificial intelligence and multicloud environments[11] - Nutanix aims to improve operational efficiencies and reduce sales and marketing expenses as a percentage of revenue while focusing on major accounts and pipeline growth[11] - The company continues to focus on operational efficiencies and profitable growth through investments in solutions and sales and marketing[139] - The company plans to invest in sales and marketing to support growth, expecting an increase in sales and marketing expenses in the near term[167] Customer Metrics - Total end customers increased to 28,490 as of April 30, 2025, up from 25,860 in the previous year[141] - Approximately 77% of end customers who have been with the company for 18 months or longer have made a repeat purchase, with total lifetime orders averaging 9.4 times greater than the initial order[175] - The net dollar-based retention rate (NRR) as of April 30, 2025, was 110%, down from 117% a year earlier[176] Accounting and Compliance - The company has adopted new accounting standards related to convertible debt instruments, which may impact future financial reporting[38] - The company operates a subscription-based business model, allowing customers flexibility in choosing license levels and durations based on their needs[32]

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]