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Nutanix (NTNX) Q3 Loss Narrower Than Estimated, Revenues Miss
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Nutanix (NTNX - Free Report) reported non-GAAP third-quarter fiscal 2022 loss of 5 cents per share, significantly narrower than the Zacks Consensus Estimate of a loss of 20 cents. The figure was narrower than the year-ago quarter’s loss of 41 cents per share.
Nutanix reported revenues of $403.7 million, missing the Zacks Consensus Estimate of $438.5 million. The top line improved 17% from the year-earlier quarter’s figure of $344.5 million. NTNX noted that the average contract term length declined to 3.2 years from 3.3 years in the year-ago quarter, primarily due to higher federal businesses that usually have shorter contract term lengths.
During the fiscal third quarter, Nutanix’s Annual Contract Value (ACV) billings jumped 28% to $204.7 million.
Product revenues (49.5% of revenues) increased 15.8% year over year to $199.6 million. Support, entitlements & other services revenues (50,5% of revenues) grew 18.5% to $204 million.
The top line was primarily driven by growth in NTNX’s core hyperconverged 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% of revenues) rose 21% from the year-ago quarter’s figure to $370.5 million. Professional services revenues (6% of revenues) jumped 15.4% to $22.5 million.
Non-Portable Software revenues (2% of revenues) plunged 43.7% year over year to $9.4 million. Hardware revenues (0.3% of revenues) increased 30% to $1.3 million.
Billings were up 20.7% year over year to $448 million. Nutanix’s run-rate ACV grew 19.3% year over year to $1.73 billion. Annual Recurring Revenue (ARR) climbed 46% to $1.1 billion.
During the fiscal third quarter, Nutanix added 580 customers, taking the total number of clients to 21,980.
Operating Details
During the fiscal third quarter, Nutanix’s non-GAAP gross margin expanded 160 basis points (bps) year over year to 83.3%.
Non-GAAP operating expenses decreased 5% year over year to $341.7 million.
Balance Sheet & Cash Flow
As of Apr 30, 2022, cash and cash equivalents plus short-term investments were $1.30 billion, up from $1.29 billion at the end of second-quarter fiscal 2022.
During the third quarter of fiscal 2022, cash utilized through operating activities was $3.2 million, and free cash flow was negative $20.1 million. During the first nine months of fiscal 2022, Nutanix generated $29.5 million of cash from operating activities and a free cash flow of negative $4.7 million.
Outlook
For fourth-quarter fiscal 2022, Nutanix expects ACV billings between $175 million and $185 million. Revenues are estimated between $340 million and $360 million.
Non-GAAP gross margin is estimated to be approximately 79-80%. Non-GAAP operating expenses are expected in the range of $360 million to $365 million.
Nutanix revised guidance for the full fiscal. NTNX now expects ACV billings between $735 million and $745 million compared with the previously guided range of $760-$765 million. Revenues are now estimated in the range of $1.535 billion to $1.555 billion compared with the prior range of $1.625-$1.630 billion.
Non-GAAP gross margin is now estimated to be 82% compared with the earlier guidance of 82.5%. Non-GAAP operating expenses are now projected in the range of $1.402 billion to $1.407 billion compared with the previous estimate of $1.465-$1.470 billion.
Zacks Rank & Key Picks
Nutanix currently carries a Zacks Rank #3 (Hold). Shares of NTNX have declined 32.2% in the past year.
The Zacks Consensus Estimate for Avnet's fourth-quarter fiscal 2022 earnings has been revised 55 cents northward to $1.96 per share over the past 30 days. For 2022, earnings estimates have moved 20.5% north to $6.83 per share in the past 30 days.
Avnet's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 21.2%. Shares of AVT have gained 3.9% in the past year.
The Zacks Consensus Estimate for Axcelis' second-quarter 2022 earnings has been revised 3 cents upward to 99 cents per share over the past 30 days. For 2022, ACLS' earnings estimates have moved 41 cents north to $4.40 per share in the past 30 days.
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The Zacks Consensus Estimate for Analog Devices' third-quarter fiscal 2022 earnings has been revised 24 cents upward to $2.42 per share over the past seven days. For fiscal 2022, earnings estimates have moved 81 cents north to $9.24 per share in the past seven days.
Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of ADI have decreased 1% in the past year.
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Nutanix (NTNX) Q3 Loss Narrower Than Estimated, Revenues Miss
Nutanix (NTNX - Free Report) reported non-GAAP third-quarter fiscal 2022 loss of 5 cents per share, significantly narrower than the Zacks Consensus Estimate of a loss of 20 cents. The figure was narrower than the year-ago quarter’s loss of 41 cents per share.
Nutanix reported revenues of $403.7 million, missing the Zacks Consensus Estimate of $438.5 million. The top line improved 17% from the year-earlier quarter’s figure of $344.5 million. NTNX noted that the average contract term length declined to 3.2 years from 3.3 years in the year-ago quarter, primarily due to higher federal businesses that usually have shorter contract term lengths.
During the fiscal third quarter, Nutanix’s Annual Contract Value (ACV) billings jumped 28% to $204.7 million.
Nutanix Price, Consensus and EPS Surprise
Nutanix price-consensus-eps-surprise-chart | Nutanix Quote
Top-Line Details
Product revenues (49.5% of revenues) increased 15.8% year over year to $199.6 million. Support, entitlements & other services revenues (50,5% of revenues) grew 18.5% to $204 million.
The top line was primarily driven by growth in NTNX’s core hyperconverged 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% of revenues) rose 21% from the year-ago quarter’s figure to $370.5 million. Professional services revenues (6% of revenues) jumped 15.4% to $22.5 million.
Non-Portable Software revenues (2% of revenues) plunged 43.7% year over year to $9.4 million. Hardware revenues (0.3% of revenues) increased 30% to $1.3 million.
Billings were up 20.7% year over year to $448 million. Nutanix’s run-rate ACV grew 19.3% year over year to $1.73 billion. Annual Recurring Revenue (ARR) climbed 46% to $1.1 billion.
During the fiscal third quarter, Nutanix added 580 customers, taking the total number of clients to 21,980.
Operating Details
During the fiscal third quarter, Nutanix’s non-GAAP gross margin expanded 160 basis points (bps) year over year to 83.3%.
Non-GAAP operating expenses decreased 5% year over year to $341.7 million.
Balance Sheet & Cash Flow
As of Apr 30, 2022, cash and cash equivalents plus short-term investments were $1.30 billion, up from $1.29 billion at the end of second-quarter fiscal 2022.
During the third quarter of fiscal 2022, cash utilized through operating activities was $3.2 million, and free cash flow was negative $20.1 million. During the first nine months of fiscal 2022, Nutanix generated $29.5 million of cash from operating activities and a free cash flow of negative $4.7 million.
Outlook
For fourth-quarter fiscal 2022, Nutanix expects ACV billings between $175 million and $185 million. Revenues are estimated between $340 million and $360 million.
Non-GAAP gross margin is estimated to be approximately 79-80%. Non-GAAP operating expenses are expected in the range of $360 million to $365 million.
Nutanix revised guidance for the full fiscal. NTNX now expects ACV billings between $735 million and $745 million compared with the previously guided range of $760-$765 million. Revenues are now estimated in the range of $1.535 billion to $1.555 billion compared with the prior range of $1.625-$1.630 billion.
Non-GAAP gross margin is now estimated to be 82% compared with the earlier guidance of 82.5%. Non-GAAP operating expenses are now projected in the range of $1.402 billion to $1.407 billion compared with the previous estimate of $1.465-$1.470 billion.
Zacks Rank & Key Picks
Nutanix currently carries a Zacks Rank #3 (Hold). Shares of NTNX have declined 32.2% in the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Avnet (AVT - Free Report) , Analog Devices (ADI - Free Report) and Axcelis Technologies (ACLS - Free Report) . While Avnet and Axcelis sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank of 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Avnet's fourth-quarter fiscal 2022 earnings has been revised 55 cents northward to $1.96 per share over the past 30 days. For 2022, earnings estimates have moved 20.5% north to $6.83 per share in the past 30 days.
Avnet's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 21.2%. Shares of AVT have gained 3.9% in the past year.
The Zacks Consensus Estimate for Axcelis' second-quarter 2022 earnings has been revised 3 cents upward to 99 cents per share over the past 30 days. For 2022, ACLS' earnings estimates have moved 41 cents north to $4.40 per share in the past 30 days.
Axcelis' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.5%. Shares of ACLS have jumped 38.1% in the past year.
The Zacks Consensus Estimate for Analog Devices' third-quarter fiscal 2022 earnings has been revised 24 cents upward to $2.42 per share over the past seven days. For fiscal 2022, earnings estimates have moved 81 cents north to $9.24 per share in the past seven days.
Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of ADI have decreased 1% in the past year.