Over the last year, I’ve experienced (and continue to experience) the most robust budget the Air Force units I’ve been in have had during my 8 year career. In my career field specifically, we have several years of pent up requirements and requests that we’ve started be able to purchase over the last year. This ranges across everything from adminstrative supplies, to new software and systems, and even new vehicles/tactical gear that was very out dated.
I expect this quarter and 2019 to be very strong for companies that have federal spending. This will be a tail wind for Nutanix, Pivotal, and other companies we talk about here that have meaningful federal businesses.
Boeing just reported and here’s what stuck out to me.
- "Boeing landed billions in military contracts this summer which CEO Dennis Muilenberg highlighted and said was “important new defense business.”
This was what stuck out in terms of NTNX for me. Specifically, I expect to see growing sales of Nutanix’s Tactical Data centers – how they enable DoD entities to power remote sites w/Nutanix Cloud OS.
Here’s a video outlining this product and their partnership with Klas Telecom:
- “What really surprised us to the upside was aerospace margins in the 13 percent range and they’re raising their guidance for that,” Jefferies analyst Sheila Kahyaoglu said on CNBC’s"
This point brings another company to mind. Proto Labs. They basically 3D print parts and sell them to Boeing and others which ends up making aircraft lighter, require less fuel, and ultimately raise margins.
Here’s a link from Proto Labs from 2017 detailing how they saved Boeing money https://www.protolabs.com/resources/blog/boeing-saves-millio…
and a report from ARK Invest on the potential resurgence of the 3D printing industry as a whole: http://research.ark-invest.com/hubfs/1_Download_Files_ARK-In…
Need to dive deeper on Proto Labs, but here’s some initial numbers
Revenue Quarterly YoY Growth: 34%
Total Expense Quarterly YoY Growth: 34%
Gross Profit Margin: 54%
Sales and Marketing Expense as a % of annual revenue: 17% (very low!)
Gotta actual do some work now!