Rapid Adoption of Nutanix Enterprise Cloud
Operating System Drives Record Quarterly Revenue and Billings
Nutanix, Inc. (NASDAQ:NTNX), a leader in enterprise cloud
computing, today announced financial results for its first quarter
of fiscal 2017, ended October 31, 2016.
First Quarter Fiscal Year 2017 Financial Highlights
- Revenue: $166.8 million, growing
90.1% year-over-year from $87.8 million in the first quarter of
fiscal 2016
- Billings: $239.8 million,
growing 86.9% year-over-year from $128.3 million in the first
quarter of fiscal 2016
- Net Loss: GAAP net loss of
$162.2 million, compared with a net loss of $38.5 million in the
first quarter of fiscal 2016; Non-GAAP net loss of $47.8 million,
compared to a net loss of $32.4 million in the first quarter of
fiscal 2016
- Net Loss Per Share: GAAP loss
per share of $(2.18), compared to a net loss per share of $(0.90)
in the first quarter of fiscal 2016; Pro forma non-GAAP net loss
per share of $(0.37), compared to a pro forma non-GAAP net loss per
share of $(0.27) in the first quarter of fiscal 2016
- Cash and Short-term investments:
$347.1 million, up 154.9% from the first quarter of fiscal
2016
- Deferred Revenue: $375.4
million, up 160.5% from the first quarter of fiscal 2016
- Operating Cash Flow: $4.2
million, compared to $(5.6) million in the first quarter of fiscal
2016
- Free Cash Flow: $(7.8) million,
compared to $(15.3) million in the first quarter of fiscal
2016
Reconciliations between GAAP and non-GAAP financial measures and
key performance measures are provided in the tables of this press
release.
"The time warp between an enterprise-friendly VMware and a
consumer-friendly AWS is our cloud opportunity," said Dheeraj
Pandey, chairman and CEO of Nutanix. "Our first quarter results are
reflective of the strength of our thesis on how enterprise
computing will morph in the coming three to five years."
“The backdrop of our $100 billion addressable market continues
to provide many opportunities for disciplined growth,” said Duston
Williams, chief financial officer of Nutanix. “This quarter our
federal business significantly contributed to our strong
performance. We also are pleased with the evolution of our business
model, with this quarter marking the fourth consecutive quarter of
positive cash flow from operations.”
Recent Company Highlights
- Customer growth: Nutanix ended
the first quarter of fiscal 2017 with a total of 4,473
end-customers, adding a total of 705 end-customers during the
quarter.
- Large deals increasing: Large
end-customers continue to invest in Nutanix, with cumulative
end-customers with lifetime bookings over $1 million growing to 256
in the quarter.
- Expanded platform to deliver
one-click networks: The company recently announced new and
planned capabilities including network visualization, orchestration
and security, which will further increase the value of the Nutanix
Enterprise Cloud operating system and extend the company’s
competitive differentiation.
- Completed acquisitions of PernixData
and Calm.io: The addition of PernixData and Calm.io will enable
the company to accelerate and further automate the delivery of its
Enterprise Cloud operating system.
- Once again named a Leader in
Gartner’s Magic Quadrant: For the second consecutive year,
Nutanix was recognized as a Leader in the Gartner, Inc. October
2016 Magic Quadrant for Integrated Systems.1
- Hosted 1,200+ Attendees at .NEXT
Europe: The inaugural .NEXT Conference Europe, held in Vienna,
Austria, marked the company's second largest user event in its
history.
- Renewed Dell OEM Agreement:
Signed an extension to the Dell OEM Agreement, which now runs
through June 2021, providing Dell/EMC sellers and channel partners
with uninterrupted access to Nutanix software on Dell
hardware.
- Initial Public Offering:
Completed its initial public offering, becoming listed on the
NASDAQ Stock Exchange on September 30, 2016 and selling
17.1 million shares at $16 per share.
Q2 Fiscal 2017 Financial Outlook
For the second quarter of fiscal 2017, Nutanix expects:
- Revenues between $175 and $180
million;
- Non-GAAP gross margin of approximately
60.0%, and
- Non-GAAP loss per share between $(0.35)
and $(0.36), using 142 million weighted shares outstanding.
Supplementary materials to this earnings release, including the
company’s first quarter fiscal 2017 investor presentation, can be
found at http://ir.nutanix.com/company/financial/.
All forward-looking non-GAAP financial measures contained in
this section titled "Q2 Fiscal 2017 Financial Outlook" exclude
stock-based compensation expense, and may also exclude, as
applicable, other special items. We have not reconciled guidance
for non-GAAP gross margin and non-GAAP loss per share to their most
directly comparable GAAP measures because such items that impact
these measures are not within our control and are subject to
constant change. While the actual amounts of such items will have a
significant impact on the company’s non-GAAP gross margin and
non-GAAP loss per share, a reconciliation of the non-GAAP financial
measure guidance to the corresponding GAAP measures is not
available without unreasonable effort.
1 Source: Gartner, Magic Quadrant for Integrated Systems,
[Andrew Butler, Philip Dawson, Julie Palmer, George J. Weiss,
Kiyomi Yamada], 10 October 2016. Gartner does not endorse any
vendor, product or service depicted in its research publications,
and does not advise technology users to select only those vendors
with the highest ratings or other designation. Gartner research
publications consist of the opinions of Gartner's research
organization and should not be construed as statements of fact.
Gartner disclaims all warranties, expressed or implied, with
respect to this research, including any warranties of
merchantability or fitness for a particular purpose.
Webcast and Conference Call Information
Nutanix executives will discuss the company’s first quarter
fiscal 2017 financial results on a conference call at 5:00 p.m.
Eastern time/2:00 p.m. Pacific time today. To listen to the call
via telephone, dial 1-866-393-4306 in the United States or
1-734-385-2616 from outside the United States. The conference ID is
4062277. This call is being webcast live and is available to all
interested parties on our Investor Relations website at
ir.nutanix.com. Shortly after the conclusion of the conference
call, a replay of the audio webcast will be available on Nutanix’s
Investor Relations website. A telephonic replay will be available
for one week following the conference call at 1-855-859-2056 or
1-404-537-3406, conference ID 4062277.
Non-GAAP Financial Measures and Other Key Performance
Measures
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with GAAP, we use
the following non-GAAP financial and other key performance
measures: billings, non-GAAP gross margin percentage, non-GAAP net
loss, pro forma non-GAAP net loss per share, and free cash flow. In
computing these 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, revaluation of
contingent consideration, income tax related impact, and other
acquisition-related costs), loss on debt extinguishment, and
changes in the fair value of our preferred stock warrant liability.
Billings is a performance measure which our management believes
provides useful information to investors because it represents the
amounts under binding purchase orders received by us during a given
period that have been billed, and we calculate billings by adding
the change in deferred revenue between the start and end of the
period to total revenue recognized in the same period. Free cash
flow is a performance measure that our management believes provides
useful information to 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 (used in)
provided by operating activities less purchases of property and
equipment. 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. Our management
believes that these non-GAAP financial measures 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. 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. Billings, non-GAAP
gross margin percentage, non-GAAP net loss, pro forma non-GAAP net
loss per share, and free cash flow are not substitutes for total
revenue, gross profit, net loss, net loss per share, or net cash
(used in) provided by operating activities, respectively. 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 Revenue to Billings,”
“Reconciliation of GAAP to Non-GAAP Profit Measures,” and
“Reconciliation of GAAP Net Cash (Used In) Provided By Operating
Activities to Non-GAAP Free Cash Flow,” and not to rely on any
single financial measure to evaluate our business.
Forward Looking Statements
This press release contains express and implied forward-looking
statements, including but not limited to statements relating to our
business plans and objectives, product features and technology that
are under development or in process, such as additional security
capabilities, our plans to introduce product features in the
future, the impact of the recent PernixData and Calm.io
acquisitions on our business, our competitive differentiation, and
anticipated future financial results, including but not limited to
our guidance on estimated revenues, non-GAAP gross margin, and
non-GAAP net loss per share for future fiscal periods. 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 such forward-looking statements
depends upon future events, and involves risks, uncertainties and
other factors 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 rapid evolution of the markets in which we compete; our ability
to sustain or manage future growth effectively; factors that could
result in the significant fluctuation of our future quarterly
operating results, including, among other things, our revenue 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, and fluctuations in demand and
competitive pricing pressures for our solutions; our ability to
successfully integrate acquired companies, employees and
intellectual property; failure to develop, or unexpected
difficulties or delays in developing, new product features or
technology on a timely or cost-effective basis or at all; delays in
or lack of customer or market acceptance of our new product
features or technology; the introduction, or acceleration of
adoption of, competing solutions, including public cloud
infrastructure; and other risks detailed in our prospectus filed
with the SEC on September 30, 2016 pursuant to Rule 424(b)
under the Securities Act of 1933, as amended. Additional
information will also be set forth in our Form 10-Q that will be
filed for the quarter ended October 31, 2016, which should be read
in conjunction with these financial results. Our SEC filings
are available on the Investor Relations section of the company’s
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 to update forward-looking statements to reflect actual
results or subsequent events or circumstances.
About Nutanix
Nutanix makes infrastructure invisible, elevating IT to focus on
the applications and services that power their business. The
Nutanix Enterprise Cloud platform leverages web-scale engineering
and consumer-grade design to natively converge compute,
virtualization and storage into a resilient, software-defined
solution with rich machine intelligence. The result is predictable
performance, cloud-like infrastructure consumption, robust
security, and seamless application mobility for a broad range of
enterprise applications. Learn more at www.nutanix.com or follow us
on Twitter @nutanix.
© 2016 Nutanix, Inc. All rights reserved. Nutanix and the
Nutanix logo are trademarks of Nutanix, Inc., registered in the
United States and other countries. All other brand names mentioned
herein are for identification purposes only and may be the
trademarks of their respective holder(s). AWS is a trademark of
Amazon.com, Inc., and VMware is a trademark of VMware, Inc.
NUTANIX, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, unaudited)
As of July 31,
October 31, 2016 2016 Assets Current
assets: Cash and cash equivalents $ 99,209 $ 225,463 Short-term
investments 85,991 121,649 Accounts receivable—net 110,659 147,707
Deferred commissions—current 17,864 19,398 Prepaid expenses and
other current assets 16,138 16,304 Total current
assets 329,861 530,521 Property and equipment—net 42,218 46,328
Intangible assets—net — 27,825 Goodwill — 16,784 Deferred
commissions—non-current 19,029 22,125 Other assets—non-current
7,978 4,680 Total assets $ 399,086 $ 648,263
Liabilities, Convertible Preferred Stock and
Stockholders’ (Deficit) Equity Current liabilities: Accounts
payable $ 52,111 $ 57,308 Accrued compensation and benefits 24,547
28,352 Accrued expenses and other liabilities 5,537 6,591 Deferred
revenue—current 130,569 165,833 Total current
liabilities 212,764 258,084 Deferred revenue—non-current 165,896
209,598 Senior notes 73,260 — Convertible preferred stock warrant
liability 9,679 — Early exercised stock options liability 2,320
1,874 Other liabilities—non-current 1,103 7,044 Total
liabilities 465,022 476,600 Convertible
preferred stock: Convertible preferred stock 310,379 —
Stockholders’ (deficit) equity: Common stock 1 4
Additional paid-in capital 65,629 775,667 Accumulated other
comprehensive loss (12 ) (20 ) Accumulated deficit (441,933 )
(603,988 ) Total stockholders’ (deficit) equity (376,315 ) 171,663
Total liabilities, convertible preferred stock and
stockholders’ (deficit) equity $ 399,086 $ 648,263
NUTANIX, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except share and per
share data, unaudited) Three Months
Ended October 31, 2015 2016
Revenue: Product $ 70,396 $ 129,657 Support and other services
17,360 37,152 Total revenue 87,756 166,809
Cost of revenue: Product (1) 27,657 52,210 Support and other
services (1) 7,422 17,552 Total cost of revenue
35,079 69,762 Gross profit 52,677 97,047
Operating expenses: Sales and marketing (1) 58,599 128,775
Research and development (1) 23,857 75,281 General and
administrative (1) 7,375 29,372 Total operating
expenses 89,831 233,428 Loss from operations (37,154
) (136,381 ) Other expense—net (871 ) (25,712 ) Loss before
provision for income taxes (38,025 ) (162,093 ) Provision for
income taxes 520 76 Net loss $ (38,545 ) $ (162,169 )
Net loss per share attributable to common stockholders—basic
and diluted $ (0.90 ) $ (2.18 ) Weighted-average shares used in
computing net loss per share attributable to common
stockholders—basic and diluted 42,838,933 74,373,788
(1) Includes the following stock-based compensation expense:
Product cost of sales $ 109 $ 966 Support cost of sales 293 3,350
Sales and marketing 2,118 33,891 Research and development 1,629
34,026 General and administrative $ 1,237 18,495 $
5,386 $ 90,728
During the three months ended October 31,
2016, we recorded (i) approximately $83.0 million of stock-based
compensation related to our stock awards with performance
conditions, which vesting is subject to continuous service with us
and satisfaction of certain liquidity events or/and achievement of
specified performance targets, as the vesting of these stock awards
became probable and (ii) approximately $2.5 million of stock-based
compensation expense related to our ESPP plan, which we began
offering upon the effectiveness of our IPO.
NUTANIX, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands, unaudited)
Three Months Ended October 31,
2015 2016 Cash flows from operating
activities: Net loss $ (38,545 ) $ (162,169 )
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization 5,557 8,572 Stock-based compensation
5,386 90,728 Loss on debt extinguishment — 3,320 Change in fair
value of convertible preferred stock warrant liability 771 21,133
Other (328 ) 369 Changes in operating assets and liabilities:
Accounts receivable—net (8,816 ) (36,213 ) Deferred commission
(4,529 ) (4,630 ) Prepaid expenses and other assets (419 )
840
Accounts payable (5,864 ) 5,052 Accrued compensation and benefits
(125 ) 3,518 Accrued expenses and other liabilities 763
682
Deferred revenue 40,533 72,958 Net cash (used in)
provided by operating activities (5,616 ) 4,160
Cash
flows from investing activities: Purchases of investments
(14,066 ) (87,448 ) Maturities of investments 15,225 19,950 Sales
of investments — 31,638 Payments for business acquisitions, net of
cash acquired — (184 ) Purchases of property and equipment (9,642 )
(11,915 ) Net cash used in investing activities (8,483 ) (47,959 )
Cash flows from financing activities: Proceeds from initial
public offering, net of underwriting discounts and commissions —
254,455 Payments of offering costs (803 ) (2,243 ) Proceeds from
exercise of stock options, net of repurchases 1,298 1,472 Repayment
of senior notes — (75,000 ) Debt extinguishment costs — (1,580 )
Payment of debt assumed in a business acquisition — (7,124 ) Other
586 73 Net cash provided by financing activities
1,081 170,053 Net (decrease) increase in cash and
cash equivalents (13,018 ) 126,254 Cash and cash
equivalents—beginning of period 67,879 99,209 Cash
and cash equivalents—end of period $ 54,861 $ 225,463
Supplemental disclosures of cash flow information: Cash paid
for income taxes $ 828 $ 698 Cash paid for interest $
— $ 1,271
Supplemental disclosures of non-cash
investing and financing information: Vesting of early exercised
stock options $ 1,049 $ 499 Purchases of property and equipment
included in accounts payable $ 5,308 $ 5,033 Offering costs
included in accounts payable $ 1,772 $ 367 Conversion of
convertible preferred stock to common stock, net of issuance costs
$ — $ 310,379 Reclassification of convertible preferred stock
warrant liability to additional paid-in capital $ — $ 30,812
Issuance of common stock for business acquisitions $ — $ 27,063
Reconciliation of Revenue to Billings (In
thousands, unaudited) Three Months
Ended October 31, 2015 2016
Total revenue $ 87,756 $ 166,809 Change in deferred revenue, net of
acquisitions (1) 40,533 72,958 Billings $ 128,289 $
239,767 (1) Excludes $6.0 million of deferred revenue
assumed in the PernixData acquisition.
Reconciliation of GAAP to Non-GAAP
Profit Measures
(Dollars in thousands,
unaudited)
GAAP Non-GAAP
Adjustments Non-GAAP Q1 2017
(1) (2)
(3)
(4) (5)
(6)
(7) Q1 2017 Gross profit $ 97,047 $
4,316 $ 242 $ — $ —
$ — $ — $ — $ 101,605
Gross margin 58.2 % 2.6 % 0.1 % — % — % — % — % — % 60.9 %
Operating expenses: Sales and marketing $ 128,775 $ (33,891 ) $
(167 ) $ — $ — $ — $ — $ — $ 94,717 Research and development 75,281
(34,026 ) — — — — — — 41,255 General and administrative 29,372
(18,495 ) — (672 )
(186 ) — —
— 10,019 Total operating expenses $ 233,428 $
(86,412 ) $ (167 ) $ (672 ) $ (186 ) $ — $ — $ — $ 145,991
Loss from operations $ (136,381 ) $ 90,728 $ 409 $ 672 $ 186 $ — $
— $ — $ (44,386 ) Net loss $ (162,169 ) $ 90,728 $ 409 $ 672
$ 186 $ 21,133 $ 3,320 $ (2,109 ) $ (47,830 )
Weighted-shares outstanding, basic and diluted 74,373,788
74,373,788 Pro forma adjustment 53,921,394 53,921,394
Pro forma weighted-shares outstanding, basic and diluted
128,295,182 128,295,182 Net loss per share,
basic and diluted $ (2.18 ) Pro forma net loss per share, basic and
diluted $ (1.26 ) $ 0.71 $ 0.00 $ 0.01 $ 0.00 $ 0.16 $ 0.03 $ (0.02
) $ (0.37 )
(1) Stock-based compensation expense
(2) Amortization of intangible assets
(3) Acquisition-related costs
(4) Change in fair value of contingent consideration assumed in
the PernixData acquisition (5) Change in fair value of
preferred stock warrant liability (6) Loss on debt
extinguishment (7) Partial release of valuation allowance
from the PernixData acquisition and the tax effect of stock-based
compensation expense GAAP
Non-GAAP Adjustments
Non-GAAP Q1 2016 (1)
(2) Q1 2016 Gross profit $ 52,677
$ 402 $ — $ 53,079 Gross margin 60.0 % 0.5 % — % 60.5
% Operating expenses: Sales and marketing $ 58,599 $ (2,118
) $ — $ 56,481 Research and development 23,857 (1,629 ) — 22,228
General and administrative 7,375 (1,237 ) —
6,138 Total operating expenses $ 89,831 $ (4,984 ) $
— $ 84,847 Loss from operations $ (37,154 ) $ 5,386 $ — $
(31,768 ) Net loss $ (38,545 ) $ 5,386 $
771
$
(32,388
) Weighted-shares outstanding, basic and diluted 42,838,933
42,838,933 Pro forma adjustment 76,319,511 76,319,511
Pro forma weighted-shares outstanding, basic and diluted
119,158,444 119,158,444 Net loss per share,
basic and diluted $ (0.90 ) Pro forma net loss per share, basic and
diluted $ (0.32 ) $ 0.05 $
0.01
$ (0.27 )
(1) Stock-based compensation expense (2)
Change in fair value of preferred stock warrant liability
Reconciliation of GAAP Net Cash (Used
In) Provided By Operating Activities to Non-GAAP Free Cash
Flow
(In thousands, unaudited) Three
Months Ended October 31, 2015
2016 Net cash (used in) provided by operating activities $
(5,616 ) $ 4,160 Purchases of property and equipment (9,642 )
(11,915 ) Free cash flow $ (15,258 ) $ (7,755 )
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version on businesswire.com: http://www.businesswire.com/news/home/20161129006172/en/
Nutanix, Inc.Investor Contact:Tonya Chin,
408-560-2675tonya@nutanix.comorMedia Contact:Kate Reed,
973-534-9292kreed@nutanix.com
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