Nutanix Q1 Earnings Surpass Estimates, Revenues Increase Y/Y

Core Insights - Nutanix (NTNX) reported first-quarter fiscal 2025 non-GAAP earnings of 42 cents per share, exceeding the Zacks Consensus Estimate by 35.48% and marking a 44.8% increase year over year [1] - The company's revenues grew 16% year over year to $591 million, surpassing the Zacks Consensus Estimate by 3.3% and the guided range of $565-$575 million [2] Financial Performance - Product revenues, accounting for 51.09% of total revenues, increased 22.27% year over year to $301.9 million, while support, entitlements, and other services revenues rose 9.43% to $289.03 million [4] - Subscription revenues, making up 94.88% of total revenues, climbed 16.94% to $560.6 million, and professional services revenues improved 19.49% to $27.2 million [5] - Billings increased by 5.39% year over year to $591.39 million, and annual recurring revenues rose 18.16% to $1.96 billion [5] Customer Growth and Partnerships - During the fiscal first quarter, Nutanix added 630 new customers, bringing the total client count to 27,160 [6] - The company expanded its strategic partnership with AWS to offer AWS services to clients migrating to NC2 on AWS [6] Operating Metrics - Non-GAAP gross margin expanded by 160 basis points year over year to 87.5% [7] - Non-GAAP operating expenses increased 11% year over year to $398.9 million, with non-GAAP operating income at $118.2 million, up $38.7 million compared to the previous year [8] Balance Sheet and Cash Flow - As of October 31, 2024, cash and cash equivalents plus short-term investments totaled $1.07 billion, an increase from $994.3 million at the end of the previous fiscal first quarter [9] - Cash generated through operating activities was $161.7 million, and free cash flow reached $151.9 million during the first quarter [9] Outlook - For the second quarter of fiscal 2025, revenues are projected to be between $635 million and $645 million, with a non-GAAP operating margin expected in the range of 20-21% [10] - For fiscal 2025, revenues are estimated to be between $2.435 billion and $2.465 billion, with free cash flow anticipated in the range of $560 million to $610 million [10][11]