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Nutanix (NTNX) Q3 Earnings Top Estimates, Revenues Rise Y/Y
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Nutanix (NTNX - Free Report) reported third-quarter fiscal 2024 non-GAAP earnings of 28 cents per share, which surpassed the Zacks Consensus Estimate by 64.71%. The company had delivered an adjusted earnings per share of 4 cents in the year-ago quarter.
Nutanix’s revenues climbed 17% year over year to $524.6 million, beating the Zacks Consensus Estimate by 1.64% and the guided range of $510-$520 million.
The top line was primarily driven by growth in NTNX’s core hyper-converged infrastructure software and the solid adoption of its new capabilities. Nutanix continues to witness a strong adoption of its hybrid multi-cloud solutions across Fortune 100 and Global 2000 companies.
NTNX noted that the average contract term length remained stable at three years in the year-ago quarter, as renewals continue to grow as a percentage of billings.
During the fiscal third quarter, Nutanix’s Annual Contract Value (ACV) billings jumped 20% to $288.9 million.
Product revenues (49% of total revenues) increased 20.2% year over year to $255.5 million. Support, entitlements & other services revenues (51% of total revenues) rose 14% to $269.1 million.
Subscription revenues (92.8% of total revenues) climbed 16.6% from the year-ago quarter’s figure to $486.6 million. Professional services revenues (5% of total revenues) improved 18.7% to $26.2 million.
Billings were up 20.6% year over year to $557.28 million. Annual recurring revenues climbed 24% to $1.82 billion.
During the fiscal second quarter, Nutanix added 490 customers, taking the total number of clients to 25,860.
Operating Details
In the fiscal third quarter, Nutanix’s non-GAAP gross margin expanded 250 basis points year over year to 86.5%.
Non-GAAP operating expenses increased 6% year over year to $380.4 million.
Non-GAAP operating income came in at $73.3 million compared with $56.1 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Apr 30, 2024, cash and cash equivalents plus short-term investments were $1.44 billion, down from $1.64 billion at the end of the second quarter of fiscal 2024.
During the third quarter of fiscal 2024, cash generated through operating activities was $96.4 million and free cash flow was $78.3 million.
Outlook
For the fourth quarter of fiscal 2024, Nutanix expects ACV billings between $295 million and $305 million. Revenues are estimated between $530 million and $540 million.
Non-GAAP gross margin is estimated between 85% and 86%. Non-GAAP operating margin is expected in the band of 9-10%.
For fiscal 2024, NTNX expects ACV billings between $1.12 billion and $1.13 billion. Revenues are estimated in the range of $2.13-$2.14 billion.
Non-GAAP gross margin is estimated to be 86% for fiscal 2024. Non-GAAP operating margin is projected to be 15%.
Zacks Rank & Other Key Picks
Nutanix sports a Zacks Rank #1 (Strong Buy) at present.
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Nutanix (NTNX) Q3 Earnings Top Estimates, Revenues Rise Y/Y
Nutanix (NTNX - Free Report) reported third-quarter fiscal 2024 non-GAAP earnings of 28 cents per share, which surpassed the Zacks Consensus Estimate by 64.71%. The company had delivered an adjusted earnings per share of 4 cents in the year-ago quarter.
Nutanix’s revenues climbed 17% year over year to $524.6 million, beating the Zacks Consensus Estimate by 1.64% and the guided range of $510-$520 million.
The top line was primarily driven by growth in NTNX’s core hyper-converged infrastructure software and the solid adoption of its new capabilities. Nutanix continues to witness a strong adoption of its hybrid multi-cloud solutions across Fortune 100 and Global 2000 companies.
NTNX noted that the average contract term length remained stable at three years in the year-ago quarter, as renewals continue to grow as a percentage of billings.
During the fiscal third quarter, Nutanix’s Annual Contract Value (ACV) billings jumped 20% to $288.9 million.
Nutanix Price, Consensus and EPS Surprise
Nutanix price-consensus-eps-surprise-chart | Nutanix Quote
Top-Line Details
Product revenues (49% of total revenues) increased 20.2% year over year to $255.5 million. Support, entitlements & other services revenues (51% of total revenues) rose 14% to $269.1 million.
Subscription revenues (92.8% of total revenues) climbed 16.6% from the year-ago quarter’s figure to $486.6 million. Professional services revenues (5% of total revenues) improved 18.7% to $26.2 million.
Billings were up 20.6% year over year to $557.28 million. Annual recurring revenues climbed 24% to $1.82 billion.
During the fiscal second quarter, Nutanix added 490 customers, taking the total number of clients to 25,860.
Operating Details
In the fiscal third quarter, Nutanix’s non-GAAP gross margin expanded 250 basis points year over year to 86.5%.
Non-GAAP operating expenses increased 6% year over year to $380.4 million.
Non-GAAP operating income came in at $73.3 million compared with $56.1 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Apr 30, 2024, cash and cash equivalents plus short-term investments were $1.44 billion, down from $1.64 billion at the end of the second quarter of fiscal 2024.
During the third quarter of fiscal 2024, cash generated through operating activities was $96.4 million and free cash flow was $78.3 million.
Outlook
For the fourth quarter of fiscal 2024, Nutanix expects ACV billings between $295 million and $305 million. Revenues are estimated between $530 million and $540 million.
Non-GAAP gross margin is estimated between 85% and 86%. Non-GAAP operating margin is expected in the band of 9-10%.
For fiscal 2024, NTNX expects ACV billings between $1.12 billion and $1.13 billion. Revenues are estimated in the range of $2.13-$2.14 billion.
Non-GAAP gross margin is estimated to be 86% for fiscal 2024. Non-GAAP operating margin is projected to be 15%.
Zacks Rank & Other Key Picks
Nutanix sports a Zacks Rank #1 (Strong Buy) at present.
Some other top-ranked stocks from the broader Computer and Technology sector are Micron Technology (MU - Free Report) , SecureWorks (SCWX - Free Report) and Planet Labs PBC (PL - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Micron Technology have jumped 54.2% year to date. MU is set to report third-quarter fiscal 2024 results on Jun 26.
Shares of SecureWorks have plunged 21.3% year to date. SCWX is scheduled to release first-quarter fiscal 2025 results on Jun 6.
Shares of Planet Labs PBC have lost 25.9% year to date. PL is scheduled to release first-quarter fiscal 2025 results on Jun 6.