Nutanix(NTNX)2024-12-05 21:08Financial Performance - Total revenue for the three months ended October 31, 2023, was $511,054,000, compared to $590,956,000 for the same period in 2024, representing a year-over-year increase of approximately 15.5%[18]. - Net loss for the three months ended October 31, 2023, was $(15,853,000), while net income for the same period in 2024 was $29,926,000, indicating a significant turnaround[19]. - Total revenue for the three months ended October 31, 2024, was $590.96 million, up from $511.05 million in the same period of 2023, representing a growth of approximately 15.6%[39]. - Subscription revenue increased to $560.70 million for the three months ended October 31, 2024, compared to $479.48 million in the same period of 2023, reflecting a growth of about 17%[39]. - Professional services revenue rose to $27.29 million in Q4 2024, up from $22.84 million in Q4 2023, marking an increase of approximately 19.5%[39]. - Total revenue for the fiscal year 2023 was $511,054,000, with a projected increase to $590,956,000 for 2024, representing a growth of approximately 15.5%[140]. - Non-GAAP gross profit increased from $439,250,000 in 2023 to $517,085,000 in 2024, reflecting a growth of about 17.8%[140]. - Free cash flow (non-GAAP) rose from $132,453,000 in 2023 to $151,920,000 in 2024, marking an increase of approximately 14.7%[140]. Assets and Liabilities - Total current assets increased from $1,481,294 thousand as of July 31, 2024, to $1,523,459 thousand as of October 31, 2024, reflecting a growth of approximately 2.8%[16]. - Total liabilities decreased slightly from $2,872,066 thousand to $2,866,647 thousand, a reduction of approximately 0.2%[16]. - The accumulated deficit improved from $(4,847,199) thousand to $(4,831,804) thousand, showing a reduction of approximately 0.3%[16]. - Total cash, cash equivalents, and short-term investments amounted to $1,075,450 thousand as of October 31, 2024[51]. - The company had cash, cash equivalents, and restricted cash of $614,659,000 at the end of the period for October 31, 2023, compared to $716,994,000 at the end of October 31, 2024, indicating a year-over-year increase of about 16.7%[24]. - Total accrued compensation and benefits as of October 31, 2024, is $164,670,000, down from $195,602,000 as of July 31, 2024, representing a decrease of approximately 15.8%[63]. - Total accrued expenses and other current liabilities as of October 31, 2024, is $18,968,000, down from $24,967,000 as of July 31, 2024, indicating a decrease of approximately 24.0%[64]. Revenue Recognition and Business Model - The company recognizes subscription revenue ratably over the contractual service period, with significant contributions from both software entitlement and support subscriptions and upfront software licenses[124]. - Nutanix's subscription term-based licenses typically range from one to five years, with cloud-based SaaS subscriptions extending up to five years[38]. - The company operates a subscription-based business model, with revenue from subscription term-based licenses recognized upfront, while revenue from support subscriptions is recognized ratably[145]. - As of October 31, 2024, contracted not recognized revenue was approximately $2.1 billion, with an expectation to recognize about 52% over the next 12 months[49]. Operating Expenses and Cash Flow - Operating expenses for the three months ended October 31, 2023, totaled $434,801,000, compared to $481,036,000 in 2024, reflecting a decrease of about 9.5%[18]. - Cash provided by operating activities for the three months ended October 31, 2023, was $145,473,000, increasing to $161,751,000 in 2024, an increase of approximately 11.1%[24]. - The company expects operating expenses to continue to increase in absolute dollars as part of its long-term growth strategy[160]. - Total operating lease cost for the three months ended October 31, 2024, was $9.0 million, compared to $9.6 million for the same period in 2023[79]. Shareholder Actions - The company authorized a share repurchase program of up to $350 million, with $198.9 million remaining available for future repurchases as of October 31, 2024[87]. - During the three months ended October 31, 2024, Nutanix repurchased 0.3 million shares at a weighted average price of $58.81 per share, totaling $20 million[87]. - As of October 31, 2024, Nutanix had 267.8 million shares of Class A common stock issued and outstanding[85]. Research and Development - Expectations include continued investment in research and development, particularly in generative artificial intelligence and hybrid cloud environments[7]. - Research and development expenses rose to $173,959 thousand for the three months ended October 31, 2024, from $151,975 thousand in the prior year[172]. - The company aims to enhance its research and development efforts to improve integration with ecosystem partners and expand its technology offerings, particularly in generative AI[143]. Market and Customer Insights - The company had over 27,000 end customers as of October 31, 2024, including approximately 1,060 Global 2000 enterprises[117]. - Total end customers increased to 24,930 as of October 31, 2023, with a forecasted growth to 27,160 by the end of 2024[120]. - As of October 31, 2024, approximately 76% of end customers who have been with the company for 18 months or longer made repeat purchases, with total lifetime orders averaging 8.9 times greater than their initial order[149]. Risks and Challenges - The company anticipates challenges in recruiting and retaining sufficient sales personnel to support growth initiatives[7]. - The reliance on channel and OEM partners for hardware platforms exposes the company to potential supply chain delays, impacting service delivery[147]. - A hypothetical 10% decrease in the U.S. dollar against other currencies would increase operating loss by approximately $15.9 million and $17.5 million for the three months ended October 31, 2023 and 2024, respectively[203].