Nutanix (NTNX - Free Report) reported non-GAAP first-quarter fiscal 2023 earnings of 3 cents per share, significantly narrower than the Zacks Consensus Estimate of a loss of 12 cents and a year-ago quarter’s loss of 22 cents.
Nutanix reported revenues of $433.6 million, beating the Zacks Consensus Estimate of $413.1 million. The top line climbed 15% from the year-ago quarter’s figure of $378.5 million. NTNX noted that the average contract term length declined to 3.0 years from 3.1 years in the year-ago quarter, primarily due to higher federal businesses that usually have shorter contract term lengths.
During the fiscal first quarter, Nutanix’s Annual Contract Value (ACV) billings jumped 27% to $231.9 million.
Top-Line Details
Product revenues (48.1% of revenues) increased 15.8% year over year to $208.6 million. Support, entitlements & other services revenues (52 % of revenues) grew 13% to $225 million.
The top line was primarily driven by growth in NTNX’s core hyper-converged infrastructure software and the solid adoption of its new capabilities. Nutanix continues to witness a strong adoption of its hybrid multi-cloud solutions across Fortune 100 and Global 2000 companies.
Subscription revenues (92.9% of revenues) climbed 19% from the year-ago quarter’s figure to $402.9 million. However, professional services revenues (5.1% of revenues) declined 7.5% to $22.3 million.
Non-Portable Software revenues (1.8% of revenues) plunged 45.5% year over year to $7.8 million. Hardware revenues (0.1% of revenues) slumped 71.2% to $624 million.
Billings were up 18% year over year to $469.7 million. Annual Recurring Revenues climbed 34% to $1.28 billion.
During the fiscal first quarter, Nutanix added 530 customers, taking the total number of clients to 23,130.
Operating Details
During the fiscal first quarter, Nutanix’s non-GAAP gross margin expanded 130 basis points (bps) year over year and 80 bps sequentially to 83.4%.
Non-GAAP operating expenses decreased 0.4% year over year to $351.1 million.
Balance Sheet & Cash Flow
As of Oct 31, 2022, cash and cash equivalents plus short-term investments were $1.39 billion, up from $1.32 billion at the end of fourth-quarter fiscal 2022.
During the first quarter of fiscal 2023, cash utilized through operating activities was $65.5 million and free cash flow was $45.8 million.
Outlook
For the second quarter of fiscal 2023, Nutanix expects ACV billings between $245 million and $250 million. Revenues are estimated between $460 million and $470 million.
Non-GAAP gross margin is estimated to be in the 82-83% range. Non-GAAP operating margin is expected in the band of 5-10%.
For the full fiscal 2023, NTNX expects ACV billings between $895 million and $900 million. Revenues are estimated in the range of $1.77-$1.78 billion.
Non-GAAP gross margin is estimated to be 82-83% for fiscal 2023. Non-GAAP operating margin is projected in the range of 2-4%.
Zacks Rank & Key Picks
Nutanix currently carries a Zacks Rank #3 (Hold). Shares of NTNX have declined 11.8% in the past year.
Some top-ranked stocks from the broader Computer and Technology sector are Celestica (CLS - Free Report) , Fabrinet (FN - Free Report) and Zscaler (ZS - Free Report) . While Celestica flaunts a Zacks Rank #1 (Strong Buy), Fabrinet and Zscaler carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 60 days. For 2022, earnings estimates have moved 16 cents up to $1.86 per share in the past 60 days.
CLS' earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 11.8%. Shares of the company have moved up 13.3% in the past year.
The Zacks Consensus Estimate for Fabrinet's second-quarter fiscal 2023 earnings has been revised 16 cents northward to $1.89 per share over the past 30 days. For fiscal 2023, earnings estimates have improved 7.6% to $7.48 per share in the past 30 days.
FN’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, missing once, the average surprise being 5.4%. Shares of the company have gained 16.6% in the past year.
The Zacks Consensus Estimate for Zscaler's first-quarter fiscal 2023 earnings has been revised 7 cents north to 26 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved south by a penny to $1.17 per share in the past 30 days.
ZS' earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 28.6%. Shares of the company have declined 58.1% in the past year.
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Nutanix (NTNX - Free Report) reported non-GAAP first-quarter fiscal 2023 earnings of 3 cents per share, significantly narrower than the Zacks Consensus Estimate of a loss of 12 cents and a year-ago quarter’s loss of 22 cents.
Nutanix reported revenues of $433.6 million, beating the Zacks Consensus Estimate of $413.1 million. The top line climbed 15% from the year-ago quarter’s figure of $378.5 million. NTNX noted that the average contract term length declined to 3.0 years from 3.1 years in the year-ago quarter, primarily due to higher federal businesses that usually have shorter contract term lengths.
During the fiscal first quarter, Nutanix’s Annual Contract Value (ACV) billings jumped 27% to $231.9 million.
Top-Line Details
Product revenues (48.1% of revenues) increased 15.8% year over year to $208.6 million. Support, entitlements & other services revenues (52 % of revenues) grew 13% to $225 million.
The top line was primarily driven by growth in NTNX’s core hyper-converged infrastructure software and the solid adoption of its new capabilities. Nutanix continues to witness a strong adoption of its hybrid multi-cloud solutions across Fortune 100 and Global 2000 companies.
Subscription revenues (92.9% of revenues) climbed 19% from the year-ago quarter’s figure to $402.9 million. However, professional services revenues (5.1% of revenues) declined 7.5% to $22.3 million.
Non-Portable Software revenues (1.8% of revenues) plunged 45.5% year over year to $7.8 million. Hardware revenues (0.1% of revenues) slumped 71.2% to $624 million.
Billings were up 18% year over year to $469.7 million. Annual Recurring Revenues climbed 34% to $1.28 billion.
During the fiscal first quarter, Nutanix added 530 customers, taking the total number of clients to 23,130.
Operating Details
During the fiscal first quarter, Nutanix’s non-GAAP gross margin expanded 130 basis points (bps) year over year and 80 bps sequentially to 83.4%.
Non-GAAP operating expenses decreased 0.4% year over year to $351.1 million.
Balance Sheet & Cash Flow
As of Oct 31, 2022, cash and cash equivalents plus short-term investments were $1.39 billion, up from $1.32 billion at the end of fourth-quarter fiscal 2022.
During the first quarter of fiscal 2023, cash utilized through operating activities was $65.5 million and free cash flow was $45.8 million.
Outlook
For the second quarter of fiscal 2023, Nutanix expects ACV billings between $245 million and $250 million. Revenues are estimated between $460 million and $470 million.
Non-GAAP gross margin is estimated to be in the 82-83% range. Non-GAAP operating margin is expected in the band of 5-10%.
For the full fiscal 2023, NTNX expects ACV billings between $895 million and $900 million. Revenues are estimated in the range of $1.77-$1.78 billion.
Non-GAAP gross margin is estimated to be 82-83% for fiscal 2023. Non-GAAP operating margin is projected in the range of 2-4%.
Zacks Rank & Key Picks
Nutanix currently carries a Zacks Rank #3 (Hold). Shares of NTNX have declined 11.8% in the past year.
Some top-ranked stocks from the broader Computer and Technology sector are Celestica (CLS - Free Report) , Fabrinet (FN - Free Report) and Zscaler (ZS - Free Report) . While Celestica flaunts a Zacks Rank #1 (Strong Buy), Fabrinet and Zscaler carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 60 days. For 2022, earnings estimates have moved 16 cents up to $1.86 per share in the past 60 days.
CLS' earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 11.8%. Shares of the company have moved up 13.3% in the past year.
The Zacks Consensus Estimate for Fabrinet's second-quarter fiscal 2023 earnings has been revised 16 cents northward to $1.89 per share over the past 30 days. For fiscal 2023, earnings estimates have improved 7.6% to $7.48 per share in the past 30 days.
FN’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, missing once, the average surprise being 5.4%. Shares of the company have gained 16.6% in the past year.
The Zacks Consensus Estimate for Zscaler's first-quarter fiscal 2023 earnings has been revised 7 cents north to 26 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved south by a penny to $1.17 per share in the past 30 days.
ZS' earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 28.6%. Shares of the company have declined 58.1% in the past year.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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