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Why Is Nutanix (NTNX) Up 0.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Nutanix (NTNX - Free Report) . Shares have added about 0.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nutanix due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Nutanix Q3 Earnings Top Estimates, Revenues Rise Y/Y
Nutanix 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.
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 third 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%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 32.5% due to these changes.
VGM Scores
At this time, Nutanix has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been 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.
Performance of an Industry Player
Nutanix is part of the Zacks Computers - IT Services industry. Over the past month, DXC Technology Company. (DXC - Free Report) , a stock from the same industry, has gained 24.4%. The company reported its results for the quarter ended March 2024 more than a month ago.
DXC Technology reported revenues of $3.39 billion in the last reported quarter, representing a year-over-year change of -5.7%. EPS of $0.97 for the same period compares with $1.02 a year ago.
For the current quarter, DXC Technology is expected to post earnings of $0.60 per share, indicating a change of -4.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for DXC Technology. Also, the stock has a VGM Score of A.
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Why Is Nutanix (NTNX) Up 0.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Nutanix (NTNX - Free Report) . Shares have added about 0.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nutanix due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Nutanix Q3 Earnings Top Estimates, Revenues Rise Y/Y
Nutanix 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.
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 third 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%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 32.5% due to these changes.
VGM Scores
At this time, Nutanix has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been 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.
Performance of an Industry Player
Nutanix is part of the Zacks Computers - IT Services industry. Over the past month, DXC Technology Company. (DXC - Free Report) , a stock from the same industry, has gained 24.4%. The company reported its results for the quarter ended March 2024 more than a month ago.
DXC Technology reported revenues of $3.39 billion in the last reported quarter, representing a year-over-year change of -5.7%. EPS of $0.97 for the same period compares with $1.02 a year ago.
For the current quarter, DXC Technology is expected to post earnings of $0.60 per share, indicating a change of -4.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for DXC Technology. Also, the stock has a VGM Score of A.