Reports 26% YoY ARR Growth and Strong Free Cash
Flow
Delivers Outperformance Across All Second
Quarter Guided Metrics
Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud
computing, today announced financial results for its second quarter
ended January 31, 2024.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240228914366/en/
“Our disciplined execution enabled us to deliver a solid second
quarter financial performance against an uncertain, but stable
macro backdrop,” said Rajiv Ramaswami, President and CEO of
Nutanix. “We continue to remain focused on being a long-term
strategic and innovative partner to our customers as they look to
operate in a hybrid multicloud world.”
“Our second quarter results demonstrated a good balance of top
and bottom line performance with 26% year-over-year ARR growth and
strong free cash flow generation,” said Rukmini Sivaraman, CFO of
Nutanix. “We also achieved GAAP operating profitability for the
first time, reflecting the progress we’ve made in driving operating
leverage in our model and optimizing the difference between our
GAAP and non-GAAP results.”
Second Quarter Fiscal 2024 Financial Summary
Q2 FY’24
Q2 FY’23
Y/Y Change
Annual Contract Value (ACV)1 Billings
$329.5 million
$267.6 million
23%
Annual Recurring Revenue (ARR)2
$1.74 billion
$1.38 billion
26%
Average Contract Duration3
2.8 years
3.0 years
(0.2) year
Revenue4
$565.2 million
$486.5 million
16%
GAAP Gross Margin
85.6%
82.2%
340 bps
Non-GAAP Gross Margin
87.3%
84.8%
250 bps
GAAP Operating Expenses
$446.6 million
$456.2 million
(2)%
Non-GAAP Operating Expenses
$369.4 million
$342.5 million
8%
GAAP Operating Income (Loss)
$37.0 million
$(56.5) million
$93.5 million
Non-GAAP Operating Income
$123.9 million
$70.0 million
$53.9 million
GAAP Operating Margin
6.6%
(11.6)%
18.2% pts
Non-GAAP Operating Margin
21.9%
14.4%
7.5% pts
Net Cash Provided by Operating
Activities
$186.4 million
$74.1 million
$112.3 million
Free Cash Flow
$162.6 million
$63.0 million
$99.6 million
Reconciliations between GAAP and non-GAAP financial measures and
key performance measures, to the extent available, are provided in
the tables of this press release.
Third Quarter Fiscal 2024 Outlook
ACV Billings
$265 - $275 million
Revenue
$510 - $520 million
Non-GAAP Gross Margin
~85%
Non-GAAP Operating Margin
7.5% to 8.5%
Weighted Average Shares Outstanding
(Diluted)5
Approximately 301 million
Fiscal 2024 Outlook
ACV Billings
$1.09 - $1.11 billion
Revenue
$2.12 - $2.15 billion
Non-GAAP Gross Margin
85% to 86%
Non-GAAP Operating Margin
12.5% to 13.5%
Free Cash Flow
$420 - $440 million
Supplementary materials to this press release, including our
second quarter fiscal 2024 earnings presentation, can be found at
https://ir.nutanix.com/financial/quarterly-results.
Webcast and Conference Call Information
Nutanix executives will discuss the Company’s second quarter
fiscal 2024 financial results on a conference call today at 4:30
p.m. Eastern Time/1:30 p.m. Pacific Time. Interested parties may
access the conference call by registering at this link to receive
dial in details and a unique PIN number. The conference call will
also be webcast live on the Nutanix Investor Relations website at
ir.nutanix.com. An archived replay of the webcast will be available
on the Nutanix Investor Relations website at ir.nutanix.com shortly
after the call.
Footnotes
1Annual Contract Value, or ACV, is defined as the
total annualized value of a contract, excluding amounts related to
professional services and hardware. The total annualized value for
a contract is calculated by dividing the total value of the
contract by the number of years in the term of such contract,
using, where applicable, an assumed term of five years for
contracts that do not have a specified term. ACV Billings,
for any given period, is defined as the sum of the ACV for all
contracts billed during the given period.
2Annual Recurring Revenue, or ARR, for any given
period, is defined as the sum of ACV for all non life-of-device
contracts in effect as of the end of a specific period. For the
purposes of this calculation, we assume that the contract term
begins on the date a contract is booked, unless the terms of such
contract prevent us from fulfilling our obligations until a later
period, and irrespective of the periods in which we would recognize
revenue for such contract.
3Average Contract Duration represents the dollar-weighted
term, calculated on a billings basis, across all subscription and
life-of-device contracts, using an assumed term of five years for
life-of-device licenses, executed in the period.
4Revenue was negatively impacted by a year-over-year decline in
the average contract duration, including as a result of Nutanix’s
transition to a subscription-based business model.
5Weighted average share count used in computing diluted non-GAAP
net income per share.
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 press release
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, free cash
flow, Annual Contract Value Billings (or ACV Billings), Annual
Recurring Revenue (or ARR), and Average Contract Duration. In
computing non-GAAP financial measures, we exclude certain items
such as stock-based compensation and the related income tax impact,
costs associated with our acquisitions (such as amortization of
acquired intangible assets, income tax-related impact, and other
acquisition-related costs), costs related to the impairment and
early exit of operating lease-related assets, restructuring
charges, litigation settlement accruals and legal fees related to
certain litigation matters, the amortization of the debt discount
and issuance costs, interest expense related to convertible senior
notes, gains on divestitures, and other non-recurring transactions
and the related tax impact. Non-GAAP gross margin, non-GAAP
operating expenses, non-GAAP operating income, and non-GAAP
operating margin are financial measures which we believe provide
useful information to investors because they provide meaningful
supplemental information regarding our performance and liquidity by
excluding certain expenses and expenditures such as stock-based
compensation expense that may not be indicative of our ongoing core
business operating results. Free cash flow is a performance measure
that we believe provides useful information to our management and
investors about the amount of cash generated by the business after
necessary capital expenditures, and we define free cash flow as net
cash provided by (used in) operating activities less purchases of
property and equipment. ACV Billings is a performance measure that
we believe provides useful information to our management and
investors as it allows us to better track the topline growth of our
business during our transition to a subscription-based business
model because it takes into account variability in term lengths.
ARR is a performance measure that we believe provides useful
information to our management and investors as it allows us to
better track the topline growth of our subscription business
because it takes into account variability in term lengths. We use
these non-GAAP financial and key performance measures for financial
and operational decision-making and as a means to evaluate
period-to-period comparisons. However, these non-GAAP financial and
key performance measures have limitations as analytical tools and
you should not consider them in isolation or as substitutes for
analysis of our results as reported under GAAP. Non-GAAP gross
margin, non-GAAP operating expenses, non-GAAP operating income,
non-GAAP operating margin, and free cash flow are not substitutes
for gross margin, operating expenses, operating income (loss),
operating margin, or net cash provided by (used in) operating
activities, respectively. There is no GAAP measure that is
comparable to ACV Billings, ARR, or Average Contract Duration, so
we have not reconciled the ACV Billings, ARR, or Average Contract
Duration data included in this press release to any GAAP measure.
In addition, other companies, including companies in our industry,
may calculate non-GAAP financial measures and key performance
measures differently or may use other measures to evaluate their
performance, all of which could reduce the usefulness of our
non-GAAP financial measures and key performance measures as tools
for comparison. We urge you to review the reconciliation of our
non-GAAP financial measures and key performance measures to the
most directly comparable GAAP financial measures included below in
the tables captioned “Reconciliation of GAAP to Non-GAAP Profit
Measures” and “Reconciliation of GAAP Net Cash Provided By
Operating Activities to Non-GAAP Free Cash Flow,” and not to rely
on any single financial measure to evaluate our business. This
press release also includes the following forward-looking non-GAAP
financial measures as part of our third quarter fiscal 2024 outlook
and/or our fiscal 2024 outlook: non-GAAP gross margin, non-GAAP
operating margin, and free cash flow. We are unable to reconcile
these forward-looking non-GAAP financial measures to their most
directly comparable GAAP financial measures without unreasonable
efforts, as we are currently unable to predict with a reasonable
degree of certainty the type and extent of certain items that would
be expected to impact the GAAP financial measures for these periods
but would not impact the non-GAAP financial measures.
Forward-Looking Statements
This press release contains express and implied forward-looking
statements, including, but not limited to, statements regarding:
our business momentum and prospects, our third quarter fiscal 2024
outlook, and our fiscal 2024 outlook.
These forward-looking statements are not historical facts and
instead are based on our current expectations, estimates, opinions,
and beliefs. Consequently, you should not rely on these
forward-looking statements. The accuracy of these forward-looking
statements depends upon future events and involves risks,
uncertainties, and other factors, including factors that may be
beyond our control, that may cause these statements to be
inaccurate and cause our actual results, performance or
achievements to differ materially and adversely from those
anticipated or implied by such statements, including, among others:
the inherent uncertainty or assumptions and estimates underlying
our projections and guidance, which are necessarily speculative in
nature; any failure to successfully implement or realize the full
benefits of, or unexpected difficulties or delays in successfully
implementing or realizing the full benefits of, our business plans,
strategies, initiatives, vision, and objectives; our ability to
achieve, sustain and/or manage future growth effectively; the rapid
evolution of the markets in which we compete, including the
introduction, or acceleration of adoption of, competing solutions,
including public cloud infrastructure; failure to timely and
successfully meet our customer needs; delays in or lack of customer
or market acceptance of our new solutions, products, services,
product features or technology; macroeconomic or geopolitical
uncertainty, including supply chain issues; our ability to attract,
recruit, train, retain, and, where applicable, ramp to full
productivity, qualified employees and key personnel; factors that
could result in the significant fluctuation of our future quarterly
operating results (including anticipated changes to our revenue and
product mix, the timing and magnitude of orders, shipments and
acceptance of our solutions in any given quarter, our ability to
attract new and retain existing end-customers, changes in the
pricing and availability of certain components of our solutions,
and fluctuations in demand and competitive pricing pressures for
our solutions); our ability to form new or maintain and strengthen
existing strategic alliances and partnerships, as well as our
ability to manage any changes thereto; the impact of a pandemic or
major public health concern; our ability to make share repurchases;
and other risks detailed in our Annual Report on Form 10-K for the
fiscal year ended July 31, 2023 filed with the U.S. Securities and
Exchange Commission, or the SEC, on September 21, 2023 and our
subsequent Quarterly Reports on Form 10-Q filed with the SEC.
Additional information will be set forth in our Quarterly Report on
Form 10-Q for the fiscal quarter ended January 31, 2024, which
should be read in conjunction with this press release and the
financial results included herein. Our SEC filings are available on
the Investor Relations section of our website at ir.nutanix.com and
on the SEC's website at www.sec.gov. These forward-looking
statements speak only as of the date of this press release and,
except as required by law, we assume no obligation, and expressly
disclaim any obligation, to update, alter or otherwise revise any
of these forward-looking statements to reflect actual results or
subsequent events or circumstances.
About Nutanix
Nutanix is a global leader in cloud software, offering
organizations a single platform for running apps and data across
clouds. With Nutanix, companies can reduce complexity and simplify
operations, freeing them to focus on their business outcomes.
Building on its legacy as the pioneer of hyperconverged
infrastructure, Nutanix is trusted by companies worldwide to power
hybrid multicloud environments consistently, simply, and
cost-effectively. Learn more at www.nutanix.com or follow us on
social media @nutanix.
© 2024 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix
logo, and all Nutanix product and service names mentioned herein
are registered trademarks or unregistered trademarks of Nutanix,
Inc. in the United States and other countries. Other brand names
and marks mentioned herein are for identification purposes only and
may be the trademarks of their respective holder(s). This press
release contains links to external websites that are not part of
Nutanix.com. Nutanix does not control these sites and disclaims all
responsibility for the content or accuracy of any external site.
Our decision to link to an external site should not be considered
an endorsement of any content on such a site.
NUTANIX, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
As of
July 31, 2023
January 31, 2024
(in thousands)
Assets
Current assets:
Cash and cash equivalents
$
512,929
$
679,246
Short-term investments
924,466
964,714
Accounts receivable, net
157,251
189,046
Deferred commissions—current
120,001
138,606
Prepaid expenses and other current
assets
147,087
108,825
Total current assets
1,861,734
2,080,437
Property and equipment, net
111,865
115,224
Operating lease right-of-use assets
93,554
97,307
Deferred commissions—non-current
237,990
214,555
Intangible assets, net
4,893
6,884
Goodwill
184,938
185,235
Other assets—non-current
31,941
29,892
Total assets
$
2,526,915
$
2,729,534
Liabilities and Stockholders’
Deficit
Current liabilities:
Accounts payable
$
29,928
$
39,544
Accrued compensation and benefits
143,679
177,837
Accrued expenses and other current
liabilities
109,269
22,401
Deferred revenue—current
823,665
893,889
Operating lease liabilities—current
29,567
29,151
Total current liabilities
1,136,108
1,162,822
Deferred revenue—non-current
771,367
814,605
Operating lease
liabilities—non-current
68,940
73,720
Convertible senior notes, net
1,218,165
1,250,434
Other liabilities—non-current
39,754
39,635
Total liabilities
3,234,334
3,341,216
Stockholders’ deficit:
Common stock
6
6
Additional paid-in capital
3,930,668
4,039,779
Accumulated other comprehensive (loss)
income
(5,171
)
879
Accumulated deficit
(4,632,922
)
(4,652,346
)
Total stockholders’ deficit
(707,419
)
(611,682
)
Total liabilities and stockholders’
deficit
$
2,526,915
$
2,729,534
NUTANIX, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended January
31,
Six Months Ended January
31,
2023
2024
2023
2024
(in thousands, except per
share data)
Revenue:
Product
$
250,538
$
299,660
$
459,112
$
546,582
Support, entitlements and other
services
235,957
265,573
460,992
529,705
Total revenue
486,495
565,233
920,104
1,076,287
Cost of revenue:
Product (1)(2)
15,506
9,402
28,022
19,636
Support, entitlements and other services
(1)
71,299
72,154
141,278
143,879
Total cost of revenue
86,805
81,556
169,300
163,515
Gross profit
399,690
483,677
750,804
912,772
Operating expenses:
Sales and marketing (1)(2)
229,788
236,702
466,010
472,025
Research and development (1)
142,301
160,401
291,744
312,376
General and administrative (1)
84,109
49,529
130,213
97,032
Total operating expenses
456,198
446,632
887,967
881,433
(Loss) income from operations
(56,508
)
37,045
(137,163
)
31,339
Other (expense) income, net
(10,112
)
2,096
(23,528
)
(3,179
)
(Loss) income before provision for income
taxes
(66,620
)
39,141
(160,691
)
28,160
Provision for income taxes
4,170
6,346
9,613
11,218
Net (loss) income
$
(70,790
)
$
32,795
$
(170,304
)
$
16,942
Net (loss) income per share attributable
to Class A common stockholders, basic
$
(0.31
)
$
0.13
$
(0.74
)
$
0.07
Net (loss) income per share attributable
to Class A common stockholders, diluted
$
(0.31
)
$
0.12
$
(0.74
)
$
0.09
Weighted average shares used in computing
net (loss) income per share attributable to Class A common
stockholders, basic
231,924
243,853
230,229
242,667
Weighted average shares used in computing
net (loss) income per share attributable to Class A common
stockholders, diluted
231,924
298,540
230,229
294,851
(1)
Includes the following stock-based
compensation expense:
Three Months Ended January
31,
Six Months Ended January
31,
2023
2024
2023
2024
(in thousands)
Product cost of revenue
$
2,113
$
1,697
$
4,272
$
3,625
Support, entitlements and other services
cost of revenue
8,172
7,183
13,518
14,299
Sales and marketing
23,570
20,738
44,042
42,209
Research and development
36,491
40,541
75,113
78,945
General and administrative
14,944
15,810
29,300
30,889
Total stock-based compensation expense
$
85,290
$
85,969
$
166,245
$
169,967
(2)
Includes the following
amortization of intangible assets:
Three Months Ended January
31,
Six Months Ended January
31,
2023
2024
2023
2024
(in thousands)
Product cost of revenue
$
2,531
$
749
$
5,341
$
1,860
Sales and marketing
198
82
547
119
Total amortization of intangible
assets
$
2,729
$
831
$
5,888
$
1,979
NUTANIX, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended January
31,
2023
2024
(in thousands)
Cash flows from operating
activities:
Net (loss) income
$
(170,304
)
$
16,942
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization
39,479
36,389
Stock-based compensation
166,245
169,967
Amortization of debt discount and issuance
costs
21,082
22,300
Operating lease cost, net of accretion
18,158
16,046
Early exit of lease-related assets
(1,109
)
—
Non-cash interest expense
9,817
10,064
Other
(2,427
)
(8,859
)
Changes in operating assets and
liabilities:
Accounts receivable, net
(28,649
)
(19,662
)
Deferred commissions
19,110
4,830
Prepaid expenses and other assets
(28,348
)
40,575
Accounts payable
(3,171
)
8,695
Accrued compensation and benefits
(11,467
)
34,158
Accrued expenses and other liabilities
52,423
(86,009
)
Operating leases, net
(19,965
)
(14,884
)
Deferred revenue
78,723
101,329
Net cash provided by operating
activities
139,597
331,881
Cash flows from investing
activities:
Maturities of investments
529,112
429,219
Purchases of investments
(508,984
)
(455,254
)
Payments for acquisitions, net of cash
acquired
—
(4,500
)
Purchases of property and equipment
(30,772
)
(36,784
)
Net cash used in investing activities
(10,644
)
(67,319
)
Cash flows from financing
activities:
Proceeds from sales of shares through
employee equity incentive plans
22,896
15,153
Taxes paid related to net share settlement
of equity awards
—
(53,180
)
Repayment of convertible notes
(145,704
)
—
Repurchases of common stock
—
(59,192
)
Payment of finance lease obligations
(2,344
)
(1,758
)
Net cash used in financing activities
(125,152
)
(98,977
)
Net increase in cash, cash equivalents and
restricted cash
$
3,801
$
165,585
Cash, cash equivalents and restricted
cash—beginning of period
405,862
515,771
Cash, cash equivalents and restricted
cash—end of period
$
409,663
$
681,356
Restricted cash (1)
3,062
2,110
Cash and cash equivalents—end of
period
$
406,601
$
679,246
Supplemental disclosures of cash flow
information:
Cash paid for income taxes
$
16,191
$
14,168
Supplemental disclosures of non-cash
investing and financing information:
Purchases of property and equipment
included in accounts payable and accrued and other liabilities
$
18,646
$
1,648
(1)
Included within other
assets—non-current in the consolidated balance sheets.
Reconciliation of Revenue to
Billings
(Unaudited)
Three Months Ended January
31,
Six Months Ended January
31,
2023
2024
2023
2024
(in thousands)
Total revenue
$
486,495
$
565,233
$
920,104
$
1,076,287
Change in deferred revenue
42,602
51,250
78,723
101,329
Total billings
$
529,097
$
616,483
$
998,827
$
1,177,616
Disaggregation of Revenue and
Billings
(Unaudited)
Three Months Ended January
31,
Six Months Ended January
31,
2023
2024
2023
2024
(in thousands)
Disaggregation of revenue:
Subscription revenue
$
450,948
$
531,983
$
853,872
$
1,011,461
Professional services revenue
23,442
25,008
45,720
47,843
Other non-subscription product revenue
12,105
8,242
20,512
16,983
Total revenue
$
486,495
$
565,233
$
920,104
$
1,076,287
Disaggregation of billings:
Subscription billings
$
494,363
$
572,759
$
935,793
$
1,101,673
Professional services billings
22,629
35,482
42,522
58,960
Other non-subscription product
billings
12,105
8,242
20,512
16,983
Total billings
$
529,097
$
616,483
$
998,827
$
1,177,616
Subscription revenue — Subscription revenue includes any
performance obligation which has a defined term, and is generated
from the sales of software entitlement and support subscriptions,
subscription software licenses and cloud-based Software as a
Service, or SaaS offerings.
- Ratable — We recognize revenue from software entitlement and
support subscriptions and SaaS offerings ratably over the
contractual service period, the substantial majority of which
relate to software entitlement and support subscriptions.
- Upfront — Revenue from our subscription software licenses is
generally recognized upfront upon transfer of control to the
customer, which happens when we make the software available to the
customer.
Professional services revenue — We also sell professional
services with our products. We recognize revenue related to
professional services as they are performed.
Other non-subscription product revenue — Other non-subscription
product revenue includes $10.9 million and $18.7 million of
non-portable software revenue for the three and six months ended
January 31, 2023, respectively, $7.0 million and $15.2 million of
non-portable software revenue for the three and six months ended
January 31, 2024, respectively, $1.2 million and $1.8 million of
hardware revenue for the three and six months ended January 31,
2023, respectively, and $1.2 million and $1.8 million of hardware
revenue for the three and six months ended January 31, 2024,
respectively.
- Non-portable software revenue — Non-portable software revenue
includes sales of our enterprise cloud platform when delivered on a
configured-to-order appliance by us or one of our OEM partners. The
software licenses associated with these sales are typically
non-portable and can be used over the life of the appliance on
which the software is delivered. Revenue from our non-portable
software products is generally recognized upon transfer of control
to the customer.
- Hardware revenue — In transactions where the hardware appliance
is purchased directly from Nutanix, we consider ourselves to be the
principal in the transaction and we record revenue and costs of
goods sold on a gross basis. We consider the amount allocated to
hardware revenue to be equivalent to the cost of the hardware
procured. Hardware revenue is generally recognized upon transfer of
control to the customer.
Annual Contract Value Billings
and Annual Recurring Revenue
(Unaudited)
Three Months Ended January
31,
Six Months Ended January
31,
2023
2024
2023
2024
(in thousands)
Annual Contract Value Billings (ACV
Billings)
$
267,622
$
329,481
$
483,142
$
598,407
Annual Recurring Revenue (ARR)
$
1,377,713
$
1,737,364
$
1,377,713
$
1,737,364
Reconciliation of GAAP to
Non-GAAP Profit Measures
(Unaudited)
GAAP
Non-GAAP Adjustments
Non-GAAP
Three Months Ended January 31,
2024
(1)
(2)
(3)
(4)
(5)
(6)
Three Months Ended January 31,
2024
(in thousands, except
percentages and per share data)
Gross profit
$
483,677
$
8,880
$
749
$
—
$
—
$
—
$
—
$
493,306
Gross margin
85.6
%
1.6
%
0.1
%
—
—
—
—
87.3
%
Operating expenses:
Sales and marketing
236,702
(20,738
)
(82
)
194
—
—
—
216,076
Research and development
160,401
(40,541
)
—
—
—
—
—
119,860
General and administrative
49,529
(15,810
)
—
—
(227
)
—
—
33,492
Total operating expenses
446,632
(77,089
)
(82
)
194
(227
)
—
—
369,428
Income from operations
37,045
85,969
831
(194
)
227
—
—
123,878
Operating margin
6.6
%
15.2
%
0.1
%
—
—
—
—
21.9
%
Net income
$
32,795
$
85,969
$
831
$
(194
)
$
117
$
16,651
$
177
$
136,346
Weighted shares outstanding, basic
243,853
243,853
Weighted shares outstanding, diluted
(7)
298,540
298,540
Net income per share, basic
$
0.13
$
0.36
$
-
$
-
$
-
$
0.07
$
-
$
0.56
Net income per share, diluted (8)
$
0.12
$
0.46
(1)
Stock-based compensation
expense
(2)
Amortization of intangible
assets
(3)
Restructuring charges
(reversals)
(4)
Other
(5)
Amortization of debt discount and
issuance costs and interest expense related to the convertible
senior notes
(6)
Income tax effect primarily
related to stock-based compensation expense
(7)
Includes 54,687 potentially
dilutive shares related to the convertible senior notes and the
issuance of shares under employee equity incentive plans
(8)
In accordance with ASC 260, in
order to calculate GAAP net income per share, diluted, the
numerator has been adjusted to add back $4,271 of interest expense
related to the convertible senior notes
GAAP
Non-GAAP Adjustments
Non-GAAP
Six Months Ended January 31,
2024
(1)
(2)
(3)
(4)
(5)
(6)
Six Months Ended January 31,
2024
(in thousands, except
percentages and per share data)
Gross profit
$
912,772
$
17,924
$
1,860
$
—
$
—
$
—
$
—
$
932,556
Gross margin
84.8
%
1.6
%
0.2
%
—
—
—
—
86.6
%
Operating expenses:
Sales and marketing
472,025
(42,209
)
(119
)
194
—
—
—
429,891
Research and development
312,376
(78,945
)
—
—
—
—
—
233,431
General and administrative
97,032
(30,889
)
—
—
(273
)
—
—
65,870
Total operating expenses
881,433
(152,043
)
(119
)
194
(273
)
—
—
729,192
Income from operations
31,339
169,967
1,979
(194
)
273
—
—
203,364
Operating margin
2.9
%
15.8
%
0.2
%
—
—
—
—
18.9
%
Net income
$
16,942
$
169,967
$
1,979
$
(194
)
$
1,083
$
32,998
$
451
$
223,226
Weighted shares outstanding, basic
242,667
242,667
Weighted shares outstanding, diluted
(7)
294,851
294,851
Net income per share, basic
$
0.07
$
0.69
$
0.01
$
-
$
-
$
0.14
$
-
$
0.91
Net income per share, diluted (8)
$
0.09
$
0.76
(1)
Stock-based compensation
expense
(2)
Amortization of intangible
assets
(3)
Restructuring charges
(reversals)
(4)
Other (amount has been adjusted
to reflect an immaterial change to the prior quarter and is now
reflected correctly for the year-to-date period)
(5)
Amortization of debt discount and
issuance costs and interest expense related to the convertible
senior notes
(6)
Income tax effect primarily
related to stock-based compensation expense
(7)
Includes 52,184 potentially
dilutive shares related to the convertible senior notes and the
issuance of shares under employee equity incentive plans
(8)
In accordance with ASC 260, in
order to calculate GAAP net income per share, diluted, the
numerator has been adjusted to add back $8,451 of interest expense
related to the convertible senior notes
GAAP
Non-GAAP Adjustments
Non-GAAP
Three Months Ended January 31,
2023
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Three Months Ended January 31,
2023
(in thousands, except
percentages and per share data)
Gross profit
$
399,690
$
10,285
$
2,531
$
—
$
(35
)
$
—
$
—
$
—
$
412,471
Gross margin
82.2
%
2.1
%
0.5
%
—
—
—
—
—
84.8
%
Operating expenses:
Sales and marketing
229,788
(23,570
)
(198
)
—
533
—
—
—
206,553
Research and development
142,301
(36,491
)
—
—
(45
)
—
—
—
105,765
General and administrative
84,109
(14,944
)
—
(806
)
(9
)
(38,185
)
—
—
30,165
Total operating expenses
456,198
(75,005
)
(198
)
(806
)
479
(38,185
)
—
—
342,483
(Loss) income from operations
(56,508
)
85,290
2,729
806
(514
)
38,185
—
—
69,988
Operating margin
(11.6
)%
17.5
%
0.6
%
0.2
%
(0.1
)%
7.8
%
—
—
14.4
%
Net (loss) income
$
(70,790
)
$
85,290
$
2,729
$
806
$
(514
)
$
38,185
$
15,887
$
543
$
72,136
Weighted shares outstanding, basic
231,924
231,924
Weighted shares outstanding, diluted
(8)
231,924
280,661
Net (loss) income per share, basic
$
(0.31
)
$
0.38
$
0.01
$
-
$
-
$
0.16
$
0.07
$
-
$
0.31
Net (loss) income per share, diluted
$
(0.31
)
$
0.26
(1)
Stock-based compensation
expense
(2)
Amortization of intangible
assets
(3)
Costs related to early exit of
existing leases
(4)
Restructuring charges
(5)
Litigation settlement accrual and
legal fees
(6)
Amortization of debt discount and
issuance costs and interest expense related to convertible senior
notes
(7)
Income tax effect primarily
related to stock-based compensation expense
(8)
Includes 48,737 potentially
dilutive shares related to convertible senior notes and the
issuance of shares under employee equity incentive plans
GAAP
Non-GAAP Adjustments
Non-GAAP
Six Months Ended January 31,
2023
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Six Months Ended January 31,
2023
(in thousands, except
percentages and per share data)
Gross profit
$
750,804
$
17,790
$
5,341
$
—
$
230
$
—
$
—
$
—
$
774,165
Gross margin
81.6
%
1.9
%
0.6
%
—
—
—
—
—
84.1
%
Operating expenses:
Sales and marketing
466,010
(44,042
)
(547
)
—
(3,283
)
—
—
—
418,138
Research and development
291,744
(75,113
)
—
—
(1,661
)
—
—
—
214,970
General and administrative
130,213
(29,300
)
—
(1,726
)
(129
)
(38,185
)
—
—
60,873
Total operating expenses
887,967
(148,455
)
(547
)
(1,726
)
(5,073
)
(38,185
)
—
—
693,981
(Loss) income from operations
(137,163
)
166,245
5,888
1,726
5,303
38,185
—
—
80,184
Operating margin
(14.9
)%
18.1
%
0.6
%
0.2
%
0.6
%
4.1
%
—
—
8.7
%
Net (loss) income
$
(170,304
)
$
166,245
$
5,888
$
1,726
$
5,303
$
38,185
$
31,617
$
1,047
$
79,707
Weighted shares outstanding, basic
230,229
230,229
Weighted shares outstanding, diluted
(8)
230,229
277,488
Net loss per share, basic
$
(0.74
)
$
0.72
$
0.03
$
0.01
$
0.02
$
0.17
$
0.14
$
-
$
0.35
Net loss per share, diluted
$
(0.74
)
$
0.29
(1)
Stock-based compensation
expense
(2)
Amortization of intangible
assets
(3)
Costs related to early exit of
existing leases
(4)
Restructuring charges
(5)
Litigation settlement accrual and
legal fees
(6)
Amortization of debt discount and
issuance costs and interest expense related to convertible senior
notes
(7)
Income tax effect primarily
related to stock-based compensation expense
(8)
Includes 47,259 potentially
dilutive shares related to convertible senior notes and the
issuance of shares under employee equity incentive plans
Reconciliation of GAAP Net
Cash Provided by Operating Activities to Non-GAAP Free Cash
Flow
(Unaudited)
Three Months Ended January
31,
Six Months Ended January
31,
2023
2024
2023
2024
(in thousands)
Net cash provided by operating
activities
$
74,084
$
186,408
$
139,597
$
331,881
Purchases of property and equipment
(11,070
)
(23,764
)
(30,772
)
(36,784
)
Free cash flow
$
63,014
$
162,644
$
108,825
$
295,097
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228914366/en/
Investor Contact: Richard Valera ir@nutanix.com
Media Contact: Jennifer Massaro pr@nutanix.com
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