Nutanix(NTNX) - 2024 Q4 - Annual Results

Financial Performance Management Commentary Management highlighted strong FY2024 performance with solid growth, improved profitability, and strategic partnership advancements, achieving positive GAAP operating income - In fiscal 2024, Nutanix made notable progress on partnerships, signing new or enhanced agreements with Cisco, NVIDIA, and Dell[2] - The company demonstrated a good balance of performance with 22% year-over-year ARR growth, strong free cash flow, and its first full year of positive GAAP operating income[2] Fourth Quarter Fiscal 2024 Financial Highlights Nutanix reported strong Q4 results, exceeding guidance with double-digit revenue and ARR growth, and significant free cash flow Q4 FY2024 Financial Highlights (vs. Q4 FY2023) | Metric | Q4 FY'24 | Q4 FY'23 | Y/Y Change | | :--- | :--- | :--- | :--- | | Annual Recurring Revenue (ARR) | $1.91 billion | $1.56 billion | 22% | | Revenue | $548.0 million | $494.2 million | 11% | | ACV Billings | $338.0 million | $278.7 million | 21% | | GAAP Gross Margin | 85.2% | 83.7% | +150 bps | | Non-GAAP Operating Income | $70.5 million | $63.6 million | +$6.9 million | | Free Cash Flow | $224.3 million | $45.5 million | +$178.8 million | Fiscal Year 2024 Financial Highlights Nutanix achieved significant FY2024 growth with 15% revenue increase to $2.15 billion and its first full year of positive GAAP operating income Full Year FY2024 Financial Highlights (vs. FY2023) | Metric | FY'24 | FY'23 | Y/Y Change | | :--- | :--- | :--- | :--- | | Annual Recurring Revenue (ARR) | $1.91 billion | $1.56 billion | 22% | | Revenue | $2.15 billion | $1.86 billion | 15% | | ACV Billings | $1.16 billion | $956.8 million | 21% | | GAAP Operating Income (Loss) | $7.6 million | $(207.2) million | +$214.8 million | | Non-GAAP Operating Income | $347.1 million | $161.0 million | +$186.1 million | | Free Cash Flow | $597.7 million | $207.0 million | +$390.7 million | Business Outlook First Quarter Fiscal 2025 Outlook Nutanix projects Q1 FY2025 revenue between $565 million and $575 million, with a non-GAAP operating margin of 14.5% to 15.5% Q1 FY2025 Guidance | Metric | Outlook | | :--- | :--- | | Revenue | $565 - $575 million | | Non-GAAP Operating Margin | 14.5% to 15.5% | | Weighted Average Shares Outstanding | Approx. 287 million | Fiscal Year 2025 Outlook Nutanix projects FY2025 revenue between $2.435 billion and $2.465 billion, with strong profitability and cash generation expected FY 2025 Guidance | Metric | Outlook | | :--- | :--- | | Revenue | $2.435 - $2.465 billion | | Non-GAAP Operating Margin | 15.5% to 17.0% | | Free Cash Flow | $540 - $600 million | Consolidated Financial Statements Consolidated Balance Sheets As of July 31, 2024, Nutanix's balance sheet shows total assets of $2.14 billion, total liabilities of $2.87 billion, and a stockholders' deficit of $728.1 million Balance Sheet Summary (in thousands) | Account | July 31, 2024 | July 31, 2023 | | :--- | :--- | :--- | | Total current assets | $1,481,294 | $1,861,734 | | Total assets | $2,143,918 | $2,526,915 | | Total current liabilities | $1,244,341 | $1,136,108 | | Total liabilities | $2,872,066 | $3,234,334 | | Total stockholders' deficit | $(728,148) | $(707,419) | Consolidated Statements of Operations For FY2024, Nutanix reported a 15% revenue increase to $2.15 billion, achieving GAAP operating income of $7.6 million, a significant turnaround from the prior year Statement of Operations Summary (Fiscal Year Ended, in thousands) | Account | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Total revenue | $2,148,816 | $1,862,895 | | Gross profit | $1,824,704 | $1,530,708 | | Income (Loss) from operations | $7,563 | $(207,150) | | Net loss | $(124,775) | $(254,560) | | Net loss per share, basic and diluted | $(0.51) | $(1.09) | Consolidated Statements of Cash Flows Nutanix demonstrated strong FY2024 cash generation, with net cash from operating activities surging to $672.9 million and a net cash inflow from investing activities Statement of Cash Flows Summary (Fiscal Year Ended, in thousands) | Activity | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $672,931 | $272,403 | | Net cash (used in) provided by investing activities | $529,589 | $(49,785) | | Net cash used in financing activities | $(1,062,629) | $(112,709) | | Net increase in cash | $139,891 | $109,909 | Supplemental Financial Information and Reconciliations Key Performance Metrics & Definitions The report defines key non-GAAP and performance metrics such as ACV Billings, ARR, and Average Contract Duration, used to evaluate the subscription-based business model - Annual Contract Value (ACV) Billings: The sum of the total annualized value of all contracts billed during a given period; Nutanix will discontinue reporting this metric beginning with Q1 fiscal 2025[11][12] - Annual Recurring Revenue (ARR): The sum of ACV for all subscription contracts in effect as of the end of a specific period, excluding life-of-device contracts[13] - Average Contract Duration: The dollar-weighted term across all subscription and life-of-device contracts executed in the period[14] Disaggregation of Revenue and Billings Nutanix's revenue is predominantly subscription-driven, with FY2024 subscription revenue at $2.02 billion, representing approximately 94% of total revenue Disaggregation of Revenue (Fiscal Year Ended, in thousands) | Revenue Source | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Subscription revenue | $2,016,776 | $1,730,848 | | Professional services revenue | $100,852 | $91,841 | | Other non-subscription product revenue | $31,188 | $40,206 | | Total revenue | $2,148,816 | $1,862,895 | Reconciliation of GAAP to Non-GAAP Measures Nutanix provides reconciliations for non-GAAP measures, adjusting for non-cash expenses, with FY2024 non-GAAP operating income at $347.1 million and free cash flow at $597.7 million FY2024 GAAP to Non-GAAP Operating Income Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | GAAP income from operations | $7,563 | | Stock-based compensation expense | $333,833 | | Amortization of intangible assets | $3,709 | | Other adjustments | $1,998 | | Non-GAAP income from operations | $347,107 | FY2024 Free Cash Flow Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | Net cash provided by operating activities (GAAP) | $672,931 | | Purchases of property and equipment | $(75,252) | | Free cash flow (Non-GAAP) | $597,679 |