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Nutanix: Fiscal 1Q17 Financial Results

Revenue up 90% at $167 million with net loss up 312% at $162 million Y/Y
This is a Press Release edited by StorageNewsletter.com on 2016.12.01

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(in $ million) 1Q16 1Q17 Growth
Revenue
87.8 166.8 90%
Net income (loss) (38.5) (162.2)  

Nutanix, Inc. announced financial results for its first quarter of fiscal 2017, ended October 31, 2016.

1FQ17 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

"The time warp between an enterprise-friendly VMware and a consumer-friendly AWS is our cloud opportunity," said Dheeraj Pandey, chairman and CEO. "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, CFO. "This quarter our federal business 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: The firm 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 OS and extend the company's competitive differentiation.
  • Completed acquisitions of PernixData and Calm.io: These additions will enable the company to accelerate and further automate the delivery of its Enterprise Cloud OS.
  • 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.
  • 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.
  • IPO: Completed its IPO, becoming listed on the NASDAQ Stock Exchange on September 30, 2016 and selling 17.1 million shares at $16 per share.

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.

Our Comments

More and more young storage companies don't care about net income and concentrate only on sales growth to dominate their market as fast as possible, waiting for better time to come back to profitability. Nutanix is a perfect example.

Good news:

  • $166.8 million in revenue, up 161% Y/Y and 19% Q/Q
  • Total of 4,473 customers, up 109% Y/Y including 376 Global 2000 customers
  • 65% of bookings from repeat customers
  • 256 customers with more than $1 million in lifetime bookings
  • 34% of bookings from international customers
  • $347.1 million in cash and short-term investments, up 154.9% from the first quarter of fiscal 2016
  • Two big OEMs, Lenovo and especially Dell EMC renewing agreement for next five years, told us Nutanix young president Sudheesh Nair, adding that Arrow and Avnet are the main distributors

Bad news:

  • Huge net loss for the quarter, $162.2 million, +321% Y/Y, +225% Q/Q
  • Accumulated deficit as high as $604 million since inception in September 2009
  • Free cash flow of -$8 million
  • Expects slower growth for next quarter: revenue between $175 million (8% Q/Q) and $180 million (+11% Q/Q)
  • HPE could be a solid competitor if it acquired SimpliVity, a rumor from one source never confirmed by anybody up to now.

Revenue by quarter
Nutanix- Fiscal 1Q17 Financial Results f1

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