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Nutanix Reports Fourth Quarter and Fiscal 2024 Financial Results

Reports 22% YoY ARR Growth and Strong Free Cash Flow for Fiscal 2024

Delivers Outperformance Across All Fourth Quarter Guided Metrics

Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced financial results for its fourth quarter and fiscal year ended July 31, 2024.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240828409461/en/

“Our fourth quarter was a solid finish to a fiscal year that showed good progress on our financial model with solid top line growth and sharp year-over-year improvement in profitability,” said Rajiv Ramaswami, President and CEO of Nutanix. “In fiscal 2024, we also made notable progress on partnerships, signing new or enhanced agreements with Cisco, NVIDIA and Dell, and continued to innovate towards our goal of being the leading platform for running applications and managing data, anywhere.”

“Our fiscal 2024 results demonstrated a good balance of top and bottom line performance with 22% year-over-year ARR growth, strong free cash flow generation and our first full year of positive GAAP operating income,” said Rukmini Sivaraman, CFO of Nutanix. “We remain focused on delivering sustainable, profitable growth.”

Fourth Quarter Fiscal 2024 Financial Summary

 

Q4 FY’24

Q4 FY’23

Y/Y Change

Annual Contract Value (ACV)1 Billings

$338.0 million

$278.7 million

21%

Annual Recurring Revenue (ARR)2

$1.91 billion

$1.56 billion

22%

Average Contract Duration3

3.1 years

3.0 years

0.1 year

Revenue

$548.0 million

$494.2 million

11%

GAAP Gross Margin

85.2%

83.7%

150 bps

Non-GAAP Gross Margin

86.9%

85.8%

110 bps

GAAP Operating Expenses

$479.2 million

$425.1 million

13%

Non-GAAP Operating Expenses

$405.5 million

$360.6 million

12%

GAAP Operating Loss

$(12.2) million

$(11.3) million

$(0.9) million

Non-GAAP Operating Income

$70.5 million

$63.6 million

$6.9 million

GAAP Operating Margin

(2.2)%

(2.3)%

0.1% pts

Non-GAAP Operating Margin

12.9%

12.9%

0% pts

Net Cash Provided by Operating Activities

$244.7 million

$58.3 million

$186.4 million

Free Cash Flow

$224.3 million

$45.5 million

$178.8 million

Fiscal 2024 Financial Summary

 

FY’24

FY’23

Y/Y Change

Annual Contract Value (ACV)1 Billings

$1.16 billion

$956.8 million

21%

Annual Recurring Revenue (ARR)2

$1.91 billion

$1.56 billion

22%

Average Contract Duration3

3.0 years

3.0 years

0.0 year

Revenue

$2.15 billion

$1.86 billion

15%

GAAP Gross Margin

84.9%

82.2%

270 bps

Non-GAAP Gross Margin

86.7%

84.6%

210 bps

GAAP Operating Expenses

$1.82 billion

$1.74 billion

5%

Non-GAAP Operating Expenses

$1.52 billion

$1.41 billion

7%

GAAP Operating Income (Loss)

$7.6 million

$(207.2) million

$214.8 million

Non-GAAP Operating Income

$347.1 million

$161.0 million

$186.1 million

GAAP Operating Margin

0.4%

(11.1)%

11.5% pts

Non-GAAP Operating Margin

16.2%

8.6%

7.6% pts

Net Cash Provided by Operating Activities

$672.9 million

$272.4 million

$400.5 million

Free Cash Flow

$597.7 million

$207.0 million

$390.7 million

Reconciliations between GAAP and non-GAAP financial measures and key performance measures, to the extent available, are provided in the tables of this press release.

First Quarter Fiscal 2025 Outlook

 

 

Revenue

$565 - $575 million

Non-GAAP Operating Margin

14.5% to 15.5%

Weighted Average Shares Outstanding (Diluted)4

Approximately 287 million

Fiscal 2025 Outlook

 

 

Revenue

$2.435 - $2.465 billion

Non-GAAP Operating Margin

15.5% to 17.0%

Free Cash Flow

$540 - $600 million

Supplementary materials to this press release, including our fourth quarter and fiscal 2024 earnings presentation, can be found at https://ir.nutanix.com/financial/quarterly-results.

Reconciliations between GAAP and non-GAAP financial measures and key performance measures, to the extent available, are provided in the tables of this press release.

Webcast and Conference Call Information

Nutanix executives will discuss the Company’s fourth quarter and fiscal 2024 financial results on a conference call today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. Interested parties may access the conference call by registering at this link to receive dial in details and a unique PIN number. The conference call will also be webcast live on the Nutanix Investor Relations website at ir.nutanix.com. An archived replay of the webcast will be available on the Nutanix Investor Relations website at ir.nutanix.com shortly after the call.

Footnotes

1Annual Contract Value, or ACV, is defined as the total annualized value of a contract. The total annualized value for a contract is calculated by dividing the total value of the contract by the number of years in the term of such contract, using, where applicable, an assumed term of five years for life-of-device contracts that do not have a specified term. Excludes amounts related to professional services and hardware. ACV Billings, for any given period, is defined as the sum of the ACV for all contracts billed during the given period. The Company will discontinue reporting ACV Billings beginning with the Company’s first quarter fiscal 2025 financial results.

2Annual Recurring Revenue, or ARR, for any given period, is defined as the sum of ACV for all subscription contracts in effect as of the end of a specific period. For the purposes of this calculation, we assume that the contract term begins on the date a contract is booked, unless the terms of such contract prevent us from fulfilling our obligations until a later period, and irrespective of the periods in which we would recognize revenue for such contract. Excludes all life-of-device contracts.

3Average Contract Duration represents the dollar-weighted term, calculated on a billings basis, across all subscription and life-of-device contracts, using an assumed term of five years for life-of-device licenses, executed in the period.

4Weighted average share count used in computing diluted non-GAAP net income per share.

Non-GAAP Financial Measures and Other Key Performance Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, this press release includes the following non-GAAP financial and other key performance measures: non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, free cash flow, Annual Contract Value Billings (or ACV Billings), Annual Recurring Revenue (or ARR), and Average Contract Duration. In computing 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, income tax-related impact, and other acquisition-related costs), costs related to the impairment and early exit of operating lease-related assets, restructuring charges, litigation settlement accruals and legal fees related to certain litigation matters, the amortization and conversion of the debt discount and issuance costs related to convertible senior notes, interest expense related to convertible senior notes, gains on divestitures, and other non-recurring transactions and the related tax impact. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, and non-GAAP operating margin are financial measures which we believe provide useful information to investors because they 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. Free cash flow is a performance measure that we believe provides useful information to our 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 provided by (used in) operating activities less purchases of property and equipment. ACV Billings is a performance measure that we believe has provided useful information to our management and investors during our transition to a subscription-based business model as it has allowed us to better track the topline growth of our business during the transition because it takes into account variability in term lengths. ARR is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the topline growth of our subscription business because it takes into account variability in term lengths. 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. 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. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, and free cash flow are not substitutes for gross margin, operating expenses, operating income (loss), operating margin, or net cash provided by (used in) operating activities, respectively. There is no GAAP measure that is comparable to ACV Billings, ARR, or Average Contract Duration, so we have not reconciled the ACV Billings, ARR, or Average Contract Duration data included in this press release to any GAAP measure. 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 GAAP to Non-GAAP Profit Measures” and “Reconciliation of GAAP Net Cash Provided By Operating Activities to Non-GAAP Free Cash Flow,” and not to rely on any single financial measure to evaluate our business. This press release also includes the following forward-looking non-GAAP financial measures as part of our first quarter fiscal 2025 outlook and/or our fiscal 2025 outlook: non-GAAP gross margin, non-GAAP operating margin, and free cash flow. We are unable to reconcile these forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures without unreasonable efforts, as we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact the GAAP financial measures for these periods but would not impact the non-GAAP financial measures.

Forward-Looking Statements

This press release contains express and implied forward-looking statements, including, but not limited to, statements regarding: our business momentum and prospects; our plan to continue innovating towards our goal of being the leading platform for running applications and managing data, anywhere; our focus on delivering sustainable, profitable growth; our first quarter fiscal 2025 outlook; and our fiscal 2025 outlook.

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 these forward-looking statements depends upon future events and involves risks, uncertainties, and other factors, including factors that may be 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 inherent uncertainty or assumptions and estimates underlying our projections and guidance, which are necessarily speculative in nature; any failure to successfully implement or realize the full benefits of, or unexpected difficulties or delays in successfully implementing or realizing the full benefits of, our business plans, strategies, initiatives, vision, objectives, momentum, prospects and outlook; our ability to achieve, sustain and/or manage future growth effectively; the rapid evolution of the markets in which we compete, including the introduction, or acceleration of adoption of, competing solutions, including public cloud infrastructure; failure to timely and successfully meet our customer needs; delays in or lack of customer or market acceptance of our new solutions, products, services, product features or technology; macroeconomic or geopolitical uncertainty; our ability to attract, recruit, train, retain, and, where applicable, ramp to full productivity, qualified employees and key personnel; factors that could result in the significant fluctuation of our future quarterly operating results (including anticipated changes to our revenue and product 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, changes in the pricing and availability of certain components of our solutions, and fluctuations in demand and competitive pricing pressures for our solutions); our ability to form new or maintain and strengthen existing strategic alliances and partnerships, as well as our ability to manage any changes thereto; our ability to make share repurchases; and other risks detailed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2023 filed with the U.S. Securities and Exchange Commission, or the SEC, on September 21, 2023 and our subsequent Quarterly Reports on Form 10-Q filed with the SEC. Additional information will be set forth in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024, which should be read in conjunction with this press release and the financial results included herein. Our SEC filings are available on the Investor Relations section of our 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, and expressly disclaim any obligation, to update, alter or otherwise revise any of these forward-looking statements to reflect actual results or subsequent events or circumstances.

About Nutanix

Nutanix is a global leader in cloud software, offering organizations a single platform for running apps and data across clouds. With Nutanix, companies can reduce complexity and simplify operations, freeing them to focus on their business outcomes. Building on its legacy as the pioneer of hyperconverged infrastructure, Nutanix is trusted by companies worldwide to power hybrid multicloud environments consistently, simply, and cost-effectively. Learn more at www.nutanix.com or follow us on social media @nutanix.

© 2024 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or unregistered trademarks of Nutanix, Inc. (“Nutanix”) in the United States and other countries. Other brand names or marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release is for informational purposes only and nothing herein constitutes a warranty or other binding commitment by Nutanix.

 

NUTANIX, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

As of

 

 

July 31,

2023

 

July 31,

2024

 

 

(in thousands)

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

512,929

 

 

$

655,270

 

Short-term investments

 

 

924,466

 

 

 

339,072

 

Accounts receivable, net

 

 

157,251

 

 

 

229,796

 

Deferred commissions—current

 

 

120,001

 

 

 

159,849

 

Prepaid expenses and other current assets

 

 

147,087

 

 

 

97,307

 

Total current assets

 

 

1,861,734

 

 

 

1,481,294

 

Property and equipment, net

 

 

111,865

 

 

 

136,180

 

Operating lease right-of-use assets

 

 

93,554

 

 

 

109,133

 

Deferred commissions—non-current

 

 

237,990

 

 

 

198,962

 

Intangible assets, net

 

 

4,893

 

 

 

5,153

 

Goodwill

 

 

184,938

 

 

 

185,235

 

Other assets—non-current

 

 

31,941

 

 

 

27,961

 

Total assets

 

$

2,526,915

 

 

$

2,143,918

 

Liabilities and Stockholders’ Deficit

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

29,928

 

 

$

45,066

 

Accrued compensation and benefits

 

 

143,679

 

 

 

195,602

 

Accrued expenses and other current liabilities

 

 

109,269

 

 

 

24,967

 

Deferred revenue—current

 

 

823,665

 

 

 

954,543

 

Operating lease liabilities—current

 

 

29,567

 

 

 

24,163

 

Total current liabilities

 

 

1,136,108

 

 

 

1,244,341

 

Deferred revenue—non-current

 

 

771,367

 

 

 

918,163

 

Operating lease liabilities—non-current

 

 

68,940

 

 

 

90,359

 

Convertible senior notes, net

 

 

1,218,165

 

 

 

570,073

 

Other liabilities—non-current

 

 

39,754

 

 

 

49,130

 

Total liabilities

 

 

3,234,334

 

 

 

2,872,066

 

Stockholders’ deficit:

 

 

 

 

Common stock

 

 

6

 

 

 

7

 

Additional paid-in capital

 

 

3,930,668

 

 

 

4,118,898

 

Accumulated other comprehensive loss

 

 

(5,171

)

 

 

146

 

Accumulated deficit

 

 

(4,632,922

)

 

 

(4,847,199

)

Total stockholders’ deficit

 

 

(707,419

)

 

 

(728,148

)

Total liabilities and stockholders’ deficit

 

$

2,526,915

 

 

$

2,143,918

 

 

NUTANIX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

July 31,

 

Fiscal Year Ended

July 31,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands, except per share data)

Revenue:

 

 

 

 

 

 

 

 

Product

 

$

240,495

 

 

$

265,901

 

 

$

912,114

 

 

$

1,067,948

 

Support, entitlements and other services

 

 

253,715

 

 

 

282,051

 

 

 

950,781

 

 

 

1,080,868

 

Total revenue

 

 

494,210

 

 

 

547,952

 

 

 

1,862,895

 

 

 

2,148,816

 

Cost of revenue:

 

 

 

 

 

 

 

 

Product (1)(2)

 

 

10,655

 

 

 

8,336

 

 

 

51,107

 

 

 

36,441

 

Support, entitlements and other services (1)

 

 

69,803

 

 

 

72,642

 

 

 

281,080

 

 

 

287,671

 

Total cost of revenue

 

 

80,458

 

 

 

80,978

 

 

 

332,187

 

 

 

324,112

 

Gross profit

 

 

413,752

 

 

 

466,974

 

 

 

1,530,708

 

 

 

1,824,704

 

Operating expenses:

 

 

 

 

 

 

 

 

Sales and marketing (1)(2)

 

 

229,425

 

 

 

259,360

 

 

 

924,696

 

 

 

977,286

 

Research and development (1)

 

 

146,201

 

 

 

167,396

 

 

 

580,961

 

 

 

638,992

 

General and administrative (1)

 

 

49,473

 

 

 

52,406

 

 

 

232,201

 

 

 

200,863

 

Total operating expenses

 

 

425,099

 

 

 

479,162

 

 

 

1,737,858

 

 

 

1,817,141

 

(Loss) income from operations

 

 

(11,347

)

 

 

(12,188

)

 

 

(207,150

)

 

 

7,563

 

Other income (expense), net

 

 

4,261

 

 

 

(106,361

)

 

 

(26,435

)

 

 

(108,881

)

Loss before provision for income taxes

 

 

(7,086

)

 

 

(118,549

)

 

 

(233,585

)

 

 

(101,318

)

Provision for income taxes

 

 

6,201

 

 

 

7,552

 

 

 

20,975

 

 

 

23,457

 

Net loss

 

$

(13,287

)

 

$

(126,101

)

 

$

(254,560

)

 

$

(124,775

)

Net loss per share attributable to Class A common stockholders, basic and diluted

 

$

(0.06

)

 

$

(0.51

)

 

$

(1.09

)

 

$

(0.51

)

Weighted average shares used in computing net loss per share attributable to Class A common stockholders, basic and diluted

 

 

237,832

 

 

 

247,886

 

 

 

233,247

 

 

 

244,743

____________________

(1)

Includes the following stock-based compensation expense:

 

 

Three Months Ended

July 31,

 

Fiscal Year Ended

July 31,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Product cost of revenue

 

$

1,863

 

 

$

1,621

 

 

$

7,966

 

 

$

6,822

 

Support, entitlements and other services cost of revenue

 

 

6,528

 

 

 

6,595

 

 

 

26,611

 

 

 

27,285

 

Sales and marketing

 

 

19,333

 

 

 

19,080

 

 

 

82,758

 

 

 

80,190

 

Research and development

 

 

31,957

 

 

 

39,120

 

 

 

139,073

 

 

 

156,784

 

General and administrative

 

 

12,911

 

 

 

15,158

 

 

 

55,337

 

 

 

62,752

 

Total stock-based compensation expense

 

$

72,592

 

 

$

81,574

 

 

$

311,745

 

 

$

333,833

 

(2)

Includes the following amortization of intangible assets:

 

 

Three Months Ended

July 31,

 

Fiscal Year Ended

July 31,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Product cost of revenue

 

$

2,091

 

 

$

766

 

 

$

9,870

 

 

$

3,392

 

Sales and marketing

 

 

111

 

 

 

99

 

 

 

827

 

 

 

317

 

Total amortization of intangible assets

 

$

2,202

 

 

$

865

 

 

$

10,697

 

 

$

3,709

 

 
 

NUTANIX, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Fiscal Year Ended

July 31,

 

 

2023

 

2024

 

 

(in thousands)

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(254,560

)

 

$

(124,775

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

76,388

 

 

 

73,199

 

Stock-based compensation

 

 

311,745

 

 

 

333,833

 

Amortization of debt discount and issuance costs

 

 

42,636

 

 

 

41,600

 

Conversion of convertible senior notes attributable to debt discount and issuance costs

 

 

 

 

 

107,877

 

Operating lease cost, net of accretion

 

 

35,357

 

 

 

31,462

 

Early exit of lease-related assets

 

 

(1,040

)

 

 

 

Gain on Frame divestiture

 

 

(10,957

)

 

 

 

Non-cash interest expense

 

 

19,757

 

 

 

18,550

 

Other

 

 

(11,388

)

 

 

(13,312

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable, net

 

 

(25,885

)

 

 

(53,811

)

Deferred commissions

 

 

9,599

 

 

 

(820

)

Prepaid expenses and other assets

 

 

(59,243

)

 

 

46,623

 

Accounts payable

 

 

(9,600

)

 

 

14,749

 

Accrued compensation and benefits

 

 

(6,027

)

 

 

51,923

 

Accrued expenses and other liabilities

 

 

53,191

 

 

 

(82,632

)

Operating leases, net

 

 

(40,257

)

 

 

(30,475

)

Deferred revenue

 

 

142,687

 

 

 

258,940

 

Net cash provided by operating activities

 

 

272,403

 

 

 

672,931

 

Cash flows from investing activities:

 

 

 

 

Maturities of investments

 

 

965,040

 

 

 

774,237

 

Purchases of investments

 

 

(955,330

)

 

 

(871,259

)

Sales of investments

 

 

 

 

 

706,363

 

Proceeds from Frame divestiture

 

 

5,909

 

 

 

 

Payments for acquisitions, net of cash acquired

 

 

 

 

 

(4,500

)

Purchases of property and equipment

 

 

(65,404

)

 

 

(75,252

)

Net cash (used in) provided by investing activities

 

 

(49,785

)

 

 

529,589

 

Cash flows from financing activities:

 

 

 

 

Proceeds from sales of shares through employee equity incentive plans

 

 

46,501

 

 

 

51,571

 

Taxes paid related to net share settlement of equity awards

 

 

(10,214

)

 

 

(161,552

)

Repayment of convertible notes

 

 

(145,704

)

 

 

(817,633

)

Repurchases of common stock

 

 

 

 

 

(131,139

)

Payment of finance lease obligations

 

 

(3,292

)

 

 

(3,876

)

Net cash used in financing activities

 

 

(112,709

)

 

 

(1,062,629

)

Net increase in cash, cash equivalents and restricted cash

 

$

109,909

 

 

$

139,891

 

Cash, cash equivalents and restricted cash—beginning of period

 

 

405,862

 

 

 

515,771

 

Cash, cash equivalents and restricted cash—end of period

 

$

515,771

 

 

$

655,662

 

Restricted cash (1)

 

 

2,842

 

 

 

392

 

Cash and cash equivalents—end of period

 

$

512,929

 

 

$

655,270

 

Supplemental disclosures of cash flow information:

 

 

 

 

Cash paid for income taxes

 

$

30,781

 

 

$

23,647

 

Supplemental disclosures of non-cash investing and financing information:

 

 

 

 

Purchases of property and equipment included in accounts payable and accrued and other liabilities

 

$

15,754

 

 

$

19,275

 

Forfeited paid-in-kind interest recognized in equity upon note conversion

 

$

 

 

$

6,019

 

____________________

(1)

Included within other assets—non-current in the consolidated balance sheets.

 

Reconciliation of Revenue to Billings

(Unaudited)

 

 

 

Three Months Ended

July 31,

 

Fiscal Year Ended

July 31,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Total revenue

 

$

494,210

 

 

$

547,952

 

 

$

1,862,895

 

 

$

2,148,816

 

Change in deferred revenue

 

 

50,631

 

 

 

124,903

 

 

 

142,687

 

 

 

258,940

 

Total billings

 

$

544,841

 

 

$

672,855

 

 

$

2,005,582

 

 

$

2,407,756

 

 
 

Disaggregation of Revenue and Billings

(Unaudited)

 

 

 

Three Months Ended

July 31,

 

Fiscal Year Ended

July 31,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Disaggregation of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription revenue

 

$

459,460

 

 

$

518,695

 

 

$

1,730,848

 

 

$

2,016,776

 

Professional services revenue

 

 

24,020

 

 

 

26,769

 

 

 

91,841

 

 

 

100,852

 

Other non-subscription product revenue

 

 

10,730

 

 

 

2,488

 

 

 

40,206

 

 

 

31,188

 

Total revenue

 

$

494,210

 

 

$

547,952

 

 

$

1,862,895

 

 

$

2,148,816

 

Disaggregation of billings:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription billings

 

$

504,191

 

 

$

636,040

 

 

$

1,868,943

 

 

$

2,253,633

 

Professional services billings

 

 

29,920

 

 

 

34,327

 

 

 

96,433

 

 

 

122,935

 

Other non-subscription product billings

 

 

10,730

 

 

 

2,488

 

 

 

40,206

 

 

 

31,188

 

Total billings

 

$

544,841

 

 

$

672,855

 

 

$

2,005,582

 

 

$

2,407,756

 

Subscription revenue — Subscription revenue includes any performance obligation which has a defined term, and is generated from the sales of software entitlement and support subscriptions, subscription software licenses and cloud-based Software as a Service, or SaaS offerings.

  • Ratable — We recognize revenue from software entitlement and support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlement and support subscriptions.
  • Upfront — Revenue from our subscription software licenses is generally recognized upfront upon transfer of control to the customer, which happens when we make the software available to the customer.

Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed.

Other non-subscription product revenue — Other non-subscription product revenue includes approximately $10.4 million and $37.4 million of non-portable software revenue for the three and twelve months ended July 31, 2023, respectively, $1.6 million and $27.9 million of non-portable software revenue for the three and twelve months ended July 31, 2024, respectively, $0.3 million and $2.8 million of hardware revenue for the three and twelve months ended July 31, 2023, respectively, and $0.9 million and $3.3 million of hardware revenue for the three and twelve months ended July 31, 2024, respectively.

  • Non-portable software revenue — Non-portable software revenue includes sales of our enterprise cloud platform when delivered on a configured-to-order appliance by us or one of our OEM partners. The software licenses associated with these sales are typically non-portable and can be used over the life of the appliance on which the software is delivered. Revenue from our non-portable software products is generally recognized upon transfer of control to the customer.
  • Hardware revenue — In transactions where the hardware appliance is purchased directly from Nutanix, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis. We consider the amount allocated to hardware revenue to be equivalent to the cost of the hardware procured. Hardware revenue is generally recognized upon transfer of control to the customer.
 

Annual Contract Value Billings and Annual Recurring Revenue

(Unaudited)

 

 

 

As of and for the

Three Months Ended

July 31,

 

As of and for the

Fiscal Year Ended

July 31,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Annual Contract Value Billings (ACV Billings)

 

$

278,699

 

 

$

337,999

 

 

$

956,810

 

 

$

1,162,428

 

Annual Recurring Revenue (ARR)

 

$

1,561,981

 

 

$

1,907,982

 

 

$

1,561,981

 

 

$

1,907,982

 

 

Reconciliation of GAAP to Non-GAAP Profit Measures

(Unaudited)

 

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Three Months

Ended July

31, 2024

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

Three Months

Ended July

31, 2024

 

 

(in thousands, except percentages and per share data)

Gross profit

 

$

466,974

 

 

$

8,216

 

 

$

766

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

475,956

 

Gross margin

 

 

85.2

%

 

 

1.6

%

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

86.9

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

259,360

 

 

 

(19,080

)

 

 

(99

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

240,181

 

Research and development

 

 

167,396

 

 

 

(39,120

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

128,276

 

General and administrative

 

 

52,406

 

 

 

(15,158

)

 

 

 

 

 

(216

)

 

 

 

 

 

 

 

 

 

 

 

37,032

 

Total operating expenses

 

 

479,162

 

 

 

(73,358

)

 

 

(99

)

 

 

(216

)

 

 

 

 

 

 

 

 

 

 

 

405,489

 

(Loss) income from operations

 

 

(12,188

)

 

 

81,574

 

 

 

865

 

 

 

216

 

 

 

 

 

 

 

 

 

 

 

 

70,467

 

Operating margin

 

 

(2.2

)%

 

 

14.9

%

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.9

%

Net (loss) income

 

$

(126,101

)

 

$

81,574

 

 

$

865

 

 

$

216

 

 

$

(120

)

 

$

119,505

 

 

$

(214

)

 

$

75,725

 

Weighted shares outstanding, basic

 

 

247,886

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

247,886

 

Weighted shares outstanding, diluted (7)

 

 

247,886

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

284,808

 

Net (loss) income per share, basic

 

$

(0.51

)

 

$

0.34

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

0.48

 

 

$

-

 

 

$

0.31

 

Net (loss) income per share, diluted

 

$

(0.51

)

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.27

 

____________________

(1)

Stock-based compensation expense

(2)

Amortization of intangible assets

(3)

Litigation-related costs

(4)

Other

(5)

Amortization and conversion of debt discount and issuance costs and interest expense related to the convertible senior notes

(6)

Income tax effect primarily related to stock-based compensation expense

(7)

Includes 36,922 potentially dilutive shares related to the convertible senior notes and the issuance of shares under employee equity incentive plans

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Fiscal Year

Ended July 31,

2024

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

(7)

 

Fiscal Year

Ended July 31,

2024

 

 

(in thousands, except percentages and per share data)

Gross profit

 

$

1,824,704

 

 

$

34,107

 

 

$

3,392

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

1,862,203

 

Gross margin

 

 

84.9

%

 

 

1.6

%

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

86.7

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

977,286

 

 

 

(80,190

)

 

 

(317

)

 

 

194

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

896,973

 

Research and development

 

 

638,992

 

 

 

(156,784

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

482,208

 

General and administrative

 

 

200,863

 

 

 

(62,752

)

 

 

 

 

 

 

 

 

(1,971

)

 

 

(225

)

 

 

 

 

 

 

 

 

135,915

 

Total operating expenses

 

 

1,817,141

 

 

 

(299,726

)

 

 

(317

)

 

 

194

 

 

 

(1,971

)

 

 

(225

)

 

 

 

 

 

 

 

 

1,515,096

 

Income from operations

 

 

7,563

 

 

 

333,833

 

 

 

3,709

 

 

 

(194

)

 

 

1,971

 

 

 

225

 

 

 

 

 

 

 

 

 

347,107

 

Operating margin

 

 

0.4

%

 

 

15.5

%

 

 

0.2

%

 

 

 

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

16.2

%

Net (loss) income

 

$

(124,775

)

 

$

333,833

 

 

$

3,709

 

 

$

(194

)

 

$

1,971

 

 

$

805

 

 

$

169,379

 

 

$

(527

)

 

$

384,201

 

Weighted shares outstanding, basic

 

 

244,743

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

244,743

 

Weighted shares outstanding, diluted (8)

 

 

244,743

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

293,901

 

Net (loss) income per share, basic

 

$

(0.51

)

 

$

1.36

 

 

$

0.02

 

 

$

-

 

 

$

0.01

 

 

$

-

 

 

$

0.69

 

 

$

-

 

 

$

1.57

 

Net (loss) income per share, diluted

 

$

(0.51

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1.31

 

____________________

(1)

Stock-based compensation expense

(2)

Amortization of intangible assets

(3)

Restructuring charges (reversals)

(4)

Litigation-related costs

(5)

Other

(6)

Amortization and conversion of debt discount and issuance costs and interest expense related to the convertible senior notes

(7)

Income tax effect primarily related to stock-based compensation expense

(8)

Includes 49,158 potentially dilutive shares related to the convertible senior notes and the issuance of shares under employee equity incentive plans

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Three

Months

Ended July

31, 2023

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

Three

Months

Ended July

31, 2023

 

 

(in thousands, except percentages and per share data)

Gross profit

 

$

413,752

 

 

$

8,391

 

 

$

2,091

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

424,234

 

Gross margin

 

 

83.7

%

 

 

1.7

%

 

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

85.8

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

229,425

 

 

 

(19,333

)

 

 

(111

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

209,981

 

Research and development

 

 

146,201

 

 

 

(31,957

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

114,244

 

General and administrative

 

 

49,473

 

 

 

(12,911

)

 

 

 

 

 

(176

)

 

 

 

 

 

 

 

 

 

 

 

36,386

 

Total operating expenses

 

 

425,099

 

 

 

(64,201

)

 

 

(111

)

 

 

(176

)

 

 

 

 

 

 

 

 

 

 

 

360,611

 

(Loss) income from operations

 

 

(11,347

)

 

 

72,592

 

 

 

2,202

 

 

 

176

 

 

 

 

 

 

 

 

 

 

 

 

63,623

 

Operating margin

 

 

(2.3

)%

 

 

14.8

%

 

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.9

%

Net (loss) income

 

$

(13,287

)

 

$

72,592

 

 

$

2,202

 

 

$

176

 

 

$

16,307

 

 

$

(10,957

)

 

$

503

 

 

$

67,536

 

Weighted shares outstanding, basic

 

 

237,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

237,832

 

Weighted shares outstanding, diluted (7)

 

 

237,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

286,033

 

Net (loss) income per share, basic

 

$

(0.06

)

 

$

0.31

 

 

$

0.01

 

 

$

-

 

 

$

0.07

 

 

$

(0.05

)

 

$

-

 

 

$

0.28

 

Net (loss) income per share, diluted

 

$

(0.06

)

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.24

 

____________________

(1)

Stock-based compensation expense

(2)

Amortization of intangible assets

(3)

Litigation settlement accrual and legal fees

(4)

Amortization of debt discount and issuance costs and interest expense related to convertible senior notes

(5)

Gain on Frame divestiture

(6)

Income tax effect primarily related to stock-based compensation expense

(7)

Includes 48,201 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Fiscal Year

Ended July

31, 2023

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

(7)

 

(8)

 

Fiscal Year

Ended July

31, 2023

 

 

(in thousands, except percentages and per share data)

Gross profit

 

$

1,530,708

 

 

$

34,577

 

 

$

9,870

 

 

$

 

 

$

230

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

1,575,385

 

Gross margin

 

 

82.2

%

 

 

1.9

%

 

 

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

84.6

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

924,696

 

 

 

(82,758

)

 

 

(827

)

 

 

 

 

 

(3,283

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

837,828

 

Research and development

 

 

580,961

 

 

 

(139,073

)

 

 

 

 

 

 

 

 

(1,661

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

440,227

 

General and administrative

 

 

232,201

 

 

 

(55,337

)

 

 

 

 

 

(1,726

)

 

 

(129

)

 

 

(38,675

)

 

 

 

 

 

 

 

 

 

 

 

136,334

 

Total operating expenses

 

 

1,737,858

 

 

 

(277,168

)

 

 

(827

)

 

 

(1,726

)

 

 

(5,073

)

 

 

(38,675

)

 

 

 

 

 

 

 

 

 

 

 

1,414,389

 

(Loss) income from operations

 

 

(207,150

)

 

 

311,745

 

 

 

10,697

 

 

 

1,726

 

 

 

5,303

 

 

 

38,675

 

 

 

 

 

 

 

 

 

 

 

 

160,996

 

Operating margin

 

 

(11.1

)%

 

 

16.6

%

 

 

0.6

%

 

 

0.1

%

 

 

0.3

%

 

 

2.1

%

 

 

 

 

 

 

 

 

 

 

 

8.6

%

Net (loss) income

 

$

(254,560

)

 

$

311,745

 

 

$

10,697

 

 

$

1,726

 

 

$

5,303

 

 

$

38,675

 

 

$

64,112

 

 

$

(10,957

)

 

$

2,219

 

 

$

168,960

 

Weighted shares outstanding, basic

 

 

233,247

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

233,247

 

Weighted shares outstanding, diluted (9)

 

 

233,247

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

281,787

 

Net (loss) income per share, basic

 

$

(1.09

)

 

$

1.33

 

 

$

0.05

 

 

$

0.01

 

 

$

0.02

 

 

$

0.17

 

 

$

0.27

 

 

$

(0.05

)

 

$

0.01

 

 

$

0.72

 

Net (loss) income per share, diluted

 

$

(1.09

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.60

 

____________________

(1)

Stock-based compensation expense

(2)

Amortization of intangible assets

(3)

Costs related to early exit of existing leases

(4)

Restructuring charges

(5)

Litigation settlement accrual and legal fees

(6)

Amortization of debt discount and issuance costs and interest expense related to convertible senior notes

(7)

Gain on Frame divestiture

(8)

Income tax effect primarily related to stock-based compensation expense

(9)

Includes 48,540 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans

Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow

(Unaudited)

 

 

 

Three Months Ended

July 31,

 

Fiscal Year Ended

July 31,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

Net cash provided by operating activities

 

$

58,309

 

 

$

244,697

 

 

$

272,403

 

 

$

672,931

 

Purchases of property and equipment

 

 

(12,801

)

 

 

(20,439

)

 

 

(65,404

)

 

 

(75,252

)

Free cash flow

 

$

45,508

 

 

$

224,258

 

 

$

206,999

 

 

$

597,679

 

 

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