Please see the following numbers:
NTNX Q End of Q TRev*. SSRev*. Seq. QoQ. TTM
Q4 2018 7/31/2018 $303.7 $267.9 18.1% 49% 37%
Q1 2019 10/31/2018 $313.3 $280.7 4.8% 44% 28%
Q2 2019 1/31/2019 $335.4 $297.4 5.9% 43% 22%
Q3 2019 4/30/2019 $287.6 $265.8 -10.6% 17% 12%
Q4 2019 7/31/2019 $299.9 $286.9 7.9% 7% 26%
Q1 2020 10/31/2019 $300.0 4.6% 7% 17%
Q2 2020 1/31/2020 $377.8 25.9% 27% 15%
Q3 2020 4/30/2020 $340.8 -9.8% 28% 17%
Q4 2020 7/31/2020 $382.0 12.1% 33% 24%
*TRev = Total revenue
*SSRev = Software & Subscription revenue
Then the growth rates are sequential, quarter over quarter and TTM.
The 2020 quarters are based on the annual revenue guide the company gave this quarter. I used the high end of the guide for the next quarter and then roughly the seasonal revenue percent for the remaining three quarters. You can see the acceleration in revenues starting the quarter after next.
In actuality, that acceleration is depressed by about 7% annually due to the business model transition.
Here are the margins and expenses.
Watch out belowwww. Operating Margins are terrible and going in the wrong direction!
GM% S&M% R&D% G&A% OpM%
61.9% 67.6% 25.2% 6.4% -37.3%
63.5% 64.8% 25.8% 4.6% -31.8%
68.4% 67.0% 28.6% 7.5% -34.7%
77.7% 61.9% 26.7% 7.5% -18.5%
78.6% 62.0% 28.4% 6.7% -18.4%
77% 64.0% 29.7% 6.3% -23.1%
77.10% 79.2% 36.0% 8.0% -46.1%
80.0% 79.3% 33.7% 7.4% -40.3%
But, the numbers above don’t tell the whole story. Revenues are compressed as a result of the transition to a subscription model. If you are interested at all, this is discussed exztensively in the conference call. But the end result is, expenses look much higher as more ratable revenue takes over.
About 10% of ACV this past year comes from new sources. The HCI space is growing in a very, very large way. Nutanix has not been disbaled by VMWare in the HCI market. In fact, Nutanix is a leader.
Nutanix made one huge investor relations mistake. While they told us about the transition from hardware to software, they completely forgot to mention the transition to a ratable business model and what the impacts would be because of it. It was nothing less than atrocious, but I don’t count out the fact management simply missed it and has made course corrections in real time they didn’t anticipate. It does seem like VMWare became much more aggressive in an instant.
Regardless of management’s folly in forecasting the change to a ratable model, the company does appear very valuable to its customers. Customer growth remains impressive at around 7-8% sequentially and I believe we just received the first DBNRR of 132% from the company.
At any rate, there is really a lot to look at given the roughly 3x valuation (EV/S) on just software and subscription along.
A.J.