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Nutanix (NTNX) Down 8% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Nutanix (NTNX - Free Report) . Shares have lost about 8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nutanix due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Nutanix Q1 Loss Narrower Than Expected, Revenues Beat
Nutanix reported first-quarter fiscal 2022 non-GAAP loss of 22 cents per share, significantly narrower than the Zacks Consensus Estimate of a loss of 76 cents per share. The figure was narrower than the year-ago quarter’s loss of 44 cents per share.
Nutanix reported revenues of $378.5 million beating the Zacks Consensus Estimate of $368 million. The top line improved 21% from the year-earlier quarter’s $312.8 million. The company noted that the average contract term length declined to 3.1 year from 3.5 years in the year-ago quarter primarily due to higher federal business, which usually have shorter contract term length.
During the fiscal first-quarter, Nutanix’s Annual Contract Value (“ACV”) billings jumped 33% to $183.3 million. ACV billings witnessed the highest year-over-year growth rate over the past two and a half years.
Top-Line Details
Product revenues (47.6% of revenues) increased 15.6% year over year to $180.1 million. Support, entitlements & other services revenues (52.4% of revenues) grew 26.4% to $198.4 million.
The top line witnessed the highest growth rate in over three years. It was primarily driven by growth in the company’s core hyper-converged infrastructure software and the solid adoption of its new capabilities. Nutanix continues to witness strong adoption of its hybrid multi cloud solutions across Fortune 100 and Global 2000 companies.
Additionally, Nutanix benefited from strong adoption of its hybrid cloud solution on Amazon’s cloud platform, Amazon Web Services (“AWS”). Large customers like a federal civilian agency, a national retailer and a Europe-based multinational pharmaceutical company utilized clusters on Amazon’s AWS through the company's cloud platform.
Subscription revenues (89.3% of revenues) rose 21.5% from the year-ago quarter to $337.9 million. Professional services revenues (6.4% of revenues) jumped 74.5% to $24.1 million.
Non-Portable Software revenues (3.8% of revenues) plunged 28.5% year over year to $14.3 million. Hardware revenues (0.6% of revenues) soared 196.7% to $2.2 million.
Billings were up 18.8% year over year to $398 million. The company’s run-rate ACV grew 23% year over year to $1.59 billion. Annual Recurring Revenue (“ARR”) climbed 67% to $952.6 million.
During the fiscal first quarter, the company added 570 customers, bringing the total number of clients to 20,700. New ACV bookings from Emerging Products witnessed year-over-year growth of 11%.
Operating Details
During the fiscal first quarter, Nutanix’s non-GAAP gross margin expanded 20 basis points (bps) year over year to 82.1%.
Non-GAAP operating expenses increased 3% year over year to $352.6 million.
Balance Sheet & Cash Flow
As of Oct 31, 2021, cash and cash equivalents plus short-term investments were $1.28 billion, up from $1.21 billion at the end of fourth-quarter fiscal 2021.
During the first quarter fiscal 2022, cash used in operating activities was $6.9 million and free cash outflow was $1.9 million.
Outlook
For second-quarter fiscal 2022, Nutanix expects ACV billings between $195 million and $200 million. Revenues are estimated between $400 million and $410 million.
Non-GAAP gross margin is estimated to be approximately 82% to 82.5%. Non-GAAP operating expenses are expected in the range $360 million to $365 million.
For full fiscal 2022, Nutanix expects ACV billings between $740 million and $750 million. Revenues are estimated in the range of $1.62 billion to $1.63 billion for the full year.
Non-GAAP gross margin is estimated to be approximately 82%, while non-GAAP operating expenses are expected in the range $1.48-$1.49 billion during fiscal 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -8.4% due to these changes.
VGM Scores
Currently, Nutanix has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Nutanix has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Nutanix (NTNX) Down 8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Nutanix (NTNX - Free Report) . Shares have lost about 8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nutanix due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Nutanix Q1 Loss Narrower Than Expected, Revenues Beat
Nutanix reported first-quarter fiscal 2022 non-GAAP loss of 22 cents per share, significantly narrower than the Zacks Consensus Estimate of a loss of 76 cents per share. The figure was narrower than the year-ago quarter’s loss of 44 cents per share.
Nutanix reported revenues of $378.5 million beating the Zacks Consensus Estimate of $368 million. The top line improved 21% from the year-earlier quarter’s $312.8 million. The company noted that the average contract term length declined to 3.1 year from 3.5 years in the year-ago quarter primarily due to higher federal business, which usually have shorter contract term length.
During the fiscal first-quarter, Nutanix’s Annual Contract Value (“ACV”) billings jumped 33% to $183.3 million. ACV billings witnessed the highest year-over-year growth rate over the past two and a half years.
Top-Line Details
Product revenues (47.6% of revenues) increased 15.6% year over year to $180.1 million. Support, entitlements & other services revenues (52.4% of revenues) grew 26.4% to $198.4 million.
The top line witnessed the highest growth rate in over three years. It was primarily driven by growth in the company’s core hyper-converged infrastructure software and the solid adoption of its new capabilities. Nutanix continues to witness strong adoption of its hybrid multi cloud solutions across Fortune 100 and Global 2000 companies.
Additionally, Nutanix benefited from strong adoption of its hybrid cloud solution on Amazon’s cloud platform, Amazon Web Services (“AWS”). Large customers like a federal civilian agency, a national retailer and a Europe-based multinational pharmaceutical company utilized clusters on Amazon’s AWS through the company's cloud platform.
Subscription revenues (89.3% of revenues) rose 21.5% from the year-ago quarter to $337.9 million. Professional services revenues (6.4% of revenues) jumped 74.5% to $24.1 million.
Non-Portable Software revenues (3.8% of revenues) plunged 28.5% year over year to $14.3 million. Hardware revenues (0.6% of revenues) soared 196.7% to $2.2 million.
Billings were up 18.8% year over year to $398 million. The company’s run-rate ACV grew 23% year over year to $1.59 billion. Annual Recurring Revenue (“ARR”) climbed 67% to $952.6 million.
During the fiscal first quarter, the company added 570 customers, bringing the total number of clients to 20,700. New ACV bookings from Emerging Products witnessed year-over-year growth of 11%.
Operating Details
During the fiscal first quarter, Nutanix’s non-GAAP gross margin expanded 20 basis points (bps) year over year to 82.1%.
Non-GAAP operating expenses increased 3% year over year to $352.6 million.
Balance Sheet & Cash Flow
As of Oct 31, 2021, cash and cash equivalents plus short-term investments were $1.28 billion, up from $1.21 billion at the end of fourth-quarter fiscal 2021.
During the first quarter fiscal 2022, cash used in operating activities was $6.9 million and free cash outflow was $1.9 million.
Outlook
For second-quarter fiscal 2022, Nutanix expects ACV billings between $195 million and $200 million. Revenues are estimated between $400 million and $410 million.
Non-GAAP gross margin is estimated to be approximately 82% to 82.5%. Non-GAAP operating expenses are expected in the range $360 million to $365 million.
For full fiscal 2022, Nutanix expects ACV billings between $740 million and $750 million. Revenues are estimated in the range of $1.62 billion to $1.63 billion for the full year.
Non-GAAP gross margin is estimated to be approximately 82%, while non-GAAP operating expenses are expected in the range $1.48-$1.49 billion during fiscal 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -8.4% due to these changes.
VGM Scores
Currently, Nutanix has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Nutanix has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.