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Nutanix (NTNX) Q2 Earnings Top Estimates, Revenues Rise Y/Y
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Nutanix (NTNX - Free Report) reported non-GAAP second-quarter fiscal 2024 earnings of 46 cents per share, surpassing the Zacks Consensus Estimate by 58.62%. The company had delivered an adjusted earnings per share of 12 cents in the year-ago quarter.
Nutanix’s revenues climbed 16% year over year to $565.2 million, beating the Zacks Consensus Estimate by 2.43% and the guided range of $545-$555 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.
NTNX noted that the average contract term length declined to 2.8 years from three 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 23% to $329.5 million.
Product revenues (53% of revenues) increased 19.6% year over year to $299.6 million. Support, entitlements & other services revenues (47% of revenues) rose 12.6% to $265.6 million.
Subscription revenues (94.1% of revenues) climbed 17.9% from the year-ago quarter’s figure to $531.9 million. However, professional services revenues (4.4% of revenues) improved 6.7% to $25 million.
Billings were up 16.5% year over year to $616.5 million. Annual recurring revenues climbed 26.1% to $1.74 billion.
During the fiscal second quarter, Nutanix added 440 customers, taking the total number of clients to 25,370.
Operating Details
During the fiscal second quarter, Nutanix’s non-GAAP gross margin expanded 250 basis points year over year to 87.3%.
Non-GAAP operating expenses increased 8% year over year to $369.4 million.
Non-GAAP operating income came in at $123.9 million compared with $70 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jan 31, 2024, cash and cash equivalents plus short-term investments were $1.64 billion, up from $1.57 billion at the end of the first quarter of fiscal 2024.
During the second quarter of fiscal 2024, cash generated through operating activities was $186.4 million and free cash flow was $162.6 million.
Outlook
For the third quarter of fiscal 2024, Nutanix expects ACV billings between $265 million and $275 million. Revenues are estimated between $510 million and $520 million.
Non-GAAP gross margin is estimated to be approximately 85%. Non-GAAP operating margin is expected in the band of 7.5-8.5%.
For fiscal 2024, NTNX expects ACV billings between $1.09 billion and $1.11 billion. Revenues are estimated in the range of $2.12-$2.15 billion.
Non-GAAP gross margin is estimated between 85% and 86% for fiscal 2024. Non-GAAP operating margin is projected in the range of 12.5-13.5%.
Zacks Rank & Key Picks
Nutanix carries a Zacks Rank #3 (Hold) at present.
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Nutanix (NTNX) Q2 Earnings Top Estimates, Revenues Rise Y/Y
Nutanix (NTNX - Free Report) reported non-GAAP second-quarter fiscal 2024 earnings of 46 cents per share, surpassing the Zacks Consensus Estimate by 58.62%. The company had delivered an adjusted earnings per share of 12 cents in the year-ago quarter.
Nutanix’s revenues climbed 16% year over year to $565.2 million, beating the Zacks Consensus Estimate by 2.43% and the guided range of $545-$555 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.
NTNX noted that the average contract term length declined to 2.8 years from three 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 23% to $329.5 million.
Nutanix Price, Consensus and EPS Surprise
Nutanix price-consensus-eps-surprise-chart | Nutanix Quote
Top-Line Details
Product revenues (53% of revenues) increased 19.6% year over year to $299.6 million. Support, entitlements & other services revenues (47% of revenues) rose 12.6% to $265.6 million.
Subscription revenues (94.1% of revenues) climbed 17.9% from the year-ago quarter’s figure to $531.9 million. However, professional services revenues (4.4% of revenues) improved 6.7% to $25 million.
Billings were up 16.5% year over year to $616.5 million. Annual recurring revenues climbed 26.1% to $1.74 billion.
During the fiscal second quarter, Nutanix added 440 customers, taking the total number of clients to 25,370.
Operating Details
During the fiscal second quarter, Nutanix’s non-GAAP gross margin expanded 250 basis points year over year to 87.3%.
Non-GAAP operating expenses increased 8% year over year to $369.4 million.
Non-GAAP operating income came in at $123.9 million compared with $70 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jan 31, 2024, cash and cash equivalents plus short-term investments were $1.64 billion, up from $1.57 billion at the end of the first quarter of fiscal 2024.
During the second quarter of fiscal 2024, cash generated through operating activities was $186.4 million and free cash flow was $162.6 million.
Outlook
For the third quarter of fiscal 2024, Nutanix expects ACV billings between $265 million and $275 million. Revenues are estimated between $510 million and $520 million.
Non-GAAP gross margin is estimated to be approximately 85%. Non-GAAP operating margin is expected in the band of 7.5-8.5%.
For fiscal 2024, NTNX expects ACV billings between $1.09 billion and $1.11 billion. Revenues are estimated in the range of $2.12-$2.15 billion.
Non-GAAP gross margin is estimated between 85% and 86% for fiscal 2024. Non-GAAP operating margin is projected in the range of 12.5-13.5%.
Zacks Rank & Key Picks
Nutanix carries a Zacks Rank #3 (Hold) at present.
Crowdstrike (CRWD - Free Report) , SEMrush (SEMR - Free Report) and Adobe (ADBE - Free Report) are some better-ranked stocks that investors can consider in the broader sector.
CRWD sports a Zacks Rank #1 (Strong Buy), while SEMR and ADBE carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Crowdstrike have returned 25.7% year to date. CRWD is scheduled to release fourth-quarter and fiscal 2024 results on Mar 5.
Shares of SEMrush have lost 9.1% year to date. SEMR is set to report its first-quarter 2024 results on Mar 4.
Shares of Adobe have lost 7.5% year to date. ADBE is set to release its first-quarter 2024 results on Mar 13.