With all the excitement about Pure, it seems that one of my favorite companies, Nutanix, has been overlooked. Here are my notes on their report. Please keep in mind that they are eliminating their pass-through hardware sales from revenue over the year, and moving to a primary software as a service model. In other words, revenue was up 44% in spite of eliminating the $14 million in hardware revenue. Counting the hardware revenue, it would have been up 51%. the whole report is pretty impressive.
Nutanix Jan 2018 quarter results
Continued penetration in Global 2000 accounts, record number of new customers, and growing number of large deals drive 57% billings growth and 44% revenue growth.
Software and support billings up 60% as we ramp software business
Revenue up 44%
Billings up 57%
Gross profit up 45%
Deferred Revenue up 57%
Cash Flow from Operations up 135%
Second Quarter Fiscal Year 2018 Financial Highlights
• Revenue: $287 million, up 44% from $199 million a year ago, reflecting the elimination of approximately $14 million in hardware revenue in the quarter as we shift toward pure software revenue
• Billings: $355.9 million, up 57%
• Adj gross profit of $182 million, up 45% from $126 million
• Net Loss: Adjusted net loss of $23.2 million, compared to $23.0 million a year ago.
• Adjusted net loss per share of 14 cents, versus 16 cents a year ago
• Cash: $918 million, up 159% from a year ago, primarily as a result of $509 million in proceeds from our 0% 5-year Convertible Senior Notes issued in the quarter.
• Deferred Revenue: $478 million, up 57%
• Operating Cash Flow: $46.4 million, up from $19.8 million a year ago.
• Free Cash Flow: $32.4 million, up from $7.1 million a year ago
We had an outstanding quarter that demonstrated our strong execution across many business initiatives. Our shift toward a software-centric strategy is on track and we aligned our sales compensation to support this transition. Our continued success with Global 2000 customers, the strength of our large deal execution and record number of new customers prove that we are reducing friction for our customers and providing them with an unmatched consumer-grade experience.
We are proud of our performance in Q2. During the quarter, we saw record results across all geographies, with particularly strong performances from our EMEA and APJ regions. Our 57% billings growth and our 45% increase in adjusted gross profit drove a better than expected bottom line. Our software and support billings also rose significantly during the quarter as we transition to a software-centric business model. Our strong execution and our successful convertible debt offering keep us in a strong position for the future.
• Continued customer growth: We finished the quarter with 8,870 end-customers, adding a record 1,057 new end-customers during the quarter.
• Accelerated number of million dollar deals: 57 customers with deals over $1 million in the quarter, up 104% from a year ago.
• Signed 5 Software and Support Deals Greater than $3 Million: We signed five software and support deals worth more than $3 million, of which three were worth more than $5 million.
• Named a Leader in the Gartner Magic Quadrant for hyperconverged infrastructure: Nutanix believes its placement in the Leaders quadrant is a strong validation of its vision to become the next-generation operating system for the enterprise cloud
• Released Version 5.5: Featuring Calm automation and orchestration, with new features and enhancements to the Nutanix Enterprise Cloud OS software
• Issued $575 million Zero Coupon Convertible Senior Notes:
• Signed definitive agreement to acquire Minjar
• Plans Inaugural Investor Day: Monday, March 12th at the Nasdaq Marketsite
Guidance for the quarter
• Revenues of $280 million; assuming the elimination of approximately $45 million in pass-through hardware revenue;
• Adj gross margin of 68%;
• Adj operating expenses of $219 million;