Reports 27% YoY ACV Billings Growth and Strong
YoY Free Cash Flow Growth for Fiscal 2023
Delivers Outperformance Across All Fourth
Quarter Guided Metrics
Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud
computing, today announced financial results for its fourth quarter
and fiscal year ended July 31, 2023.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20230831898036/en/
Nutanix Q4 Fiscal 2023 Earnings Summary
(Graphic: Business Wire)
“Our fourth quarter capped off a fiscal year that showed healthy
year-over-year top line growth and sharp year-over-year
improvements in profitability and free cash flow,” said Rajiv
Ramaswami, President and CEO of Nutanix. “Our consistent execution
over the course of the year against an uncertain macro backdrop is
a testament to the benefits of our subscription model, as well as
the value our customers see in the Nutanix Cloud Platform as they
look to modernize their IT footprints and implement hybrid
multicloud operating models.”
“Our fiscal year 2023 results demonstrated a good balance of
growth and profitability and further strengthened our balance
sheet,” said Rukmini Sivaraman, CFO of Nutanix. “In conjunction
with our earnings release, we’re pleased to announce that our Board
of Directors has authorized the repurchase of up to $350 million of
our stock, which we see as a reflection of confidence in the
Company’s long-term market opportunity and financial outlook.”
Fourth Quarter Fiscal 2023 Financial Summary
Q4 FY’23
Q4 FY’22
Y/Y Change
Annual Contract Value (ACV)1 Billings
$278.7 million
$193.2 million
44%
Annual Recurring Revenue (ARR)2
$1.56 billion
$1.20 billion
30%
Average Contract Term3
3.0 years
3.2 years
(0.2) year
Revenue4
$494.2 million
$385.5 million
28%
GAAP Gross Margin
83.7%
79.3%
440 bps
Non-GAAP Gross Margin
85.8%
82.6%
320 bps
GAAP Operating Expenses
$425.1 million
$439.4 million
(3)%
Non-GAAP Operating Expenses
$360.6 million
$356.2 million
1%
GAAP Operating Loss
$(11.3) million
$(133.8) million
$122.5 million
Non-GAAP Operating Income (Loss)
$63.6 million
$(37.8) million
$101.4 million
GAAP Operating Margin
(2.3)%
(34.7)%
32.4% pts
Non-GAAP Operating Margin
12.9%
(9.8)%
22.7% pts
Net Cash Provided by Operating
Activities
$58.3 million
$38.0 million
$20.3 million
Free Cash Flow
$45.5 million
$23.2 million
$22.3 million
Fiscal 2023 Financial Summary
FY’23
FY’22
Y/Y Change
Annual Contract Value (ACV)1 Billings
$956.8 million
$756.3 million
27%
Annual Recurring Revenue (ARR)2
$1.56 billion
$1.20 billion
30%
Average Contract Term3
3.0 years
3.2 years
(0.2) year
Revenue4
$1.86 billion
$1.58 billion
18%
GAAP Gross Margin
82.2%
79.7%
250 bps
Non-GAAP Gross Margin
84.6%
83.0%
160 bps
GAAP Operating Expenses
$1.74 billion
$1.72 billion
1%
Non-GAAP Operating Expenses
$1.41 billion
$1.40 billion
1%
GAAP Operating Loss
$(207.2) million
$(458.9) million
$251.7 million
Non-GAAP Operating Income (Loss)
$161.0 million
$(87.2) million
$248.2 million
GAAP Operating Margin
(11.1)%
(29.0)%
17.9% pts
Non-GAAP Operating Margin
8.6%
(5.5)%
14.1% pts
Net Cash Provided by Operating
Activities
$272.4 million
$67.5 million
$204.9 million
Free Cash Flow
$207.0 million
$18.5 million
$188.5 million
Reconciliations between GAAP and non-GAAP financial measures and
key performance measures, to the extent available, are provided in
the tables of this press release.
Recent Company Highlights
- Nutanix Announces Share Repurchase Program: Nutanix
announced that its Board of Directors has authorized the repurchase
of up to $350 million of its Class A common stock.
- Cisco and Nutanix Forge Global Strategic Partnership to
Simplify Hybrid Multicloud and Fuel Business Transformation:
Cisco and Nutanix announced a global strategic partnership to
accelerate hybrid multicloud deployments by offering the industry’s
most complete hyperconverged solution for IT modernization and
business transformation.
- Nutanix Simplifies Customer Adoption of Generative AI
with New Nutanix GPT-In-a-Box Solution: Nutanix
announced Nutanix GPT-in-a-Box, a solution for customers looking to
jump-start artificial intelligence (AI) innovation, which allows
customers to easily size, configure, and purchase AI-ready
infrastructure to fine-tune and run generative pre-trained
transformers (GPT), while maintaining control of their data and
applications.
- Nutanix Appoints Mark Templeton to its Board of
Directors: Nutanix announced that it added Mark Templeton to
its board of directors, effective July 24, 2023. Mr. Templeton is
an experienced technology leader who brings deep industry expertise
to the Nutanix board.
- Reminder for Investor Day 2023: Nutanix will be
holding its Investor Day 2023 at the New York Marriott Marquis on
September 26, 2023. The event will be webcast live beginning at
12:30 p.m. ET / 9:30 a.m. PT Interested parties can register
here.
First Quarter Fiscal 2024 Outlook
ACV Billings
$260 - $270 million
Revenue
$495 - $505 million
Non-GAAP Gross Margin
~84%
Non-GAAP Operating Margin
9% to 11%
Weighted Average Shares Outstanding
(Diluted)
Approximately 290 million
Fiscal 2024 Outlook
ACV Billings
$1.075 - $1.095 billion
Revenue
$2.085 - $2.115 billion
Non-GAAP Gross Margin
~84%
Non-GAAP Operating Margin
11% to 12%
Free Cash Flow
$280 - $300 million
Supplementary materials to this press release, including our
fourth quarter and fiscal 2023 earnings presentation, can be found
at https://ir.nutanix.com/company/financial.
Reconciliations between GAAP and non-GAAP financial measures and
key performance measures, to the extent available, are provided in
the tables of this press release.
Webcast and Conference Call Information
Nutanix executives will discuss the Company’s fourth quarter and
fiscal 2023 financial results on a conference call today at 4:30
p.m. Eastern Time/1:30 p.m. Pacific Time. Interested parties may
access the conference call by registering at this link to receive
dial in details and a unique PIN number. The conference call will
also be webcast live on the Nutanix Investor Relations website at
ir.nutanix.com. An archived replay of the webcast will be available
on the Nutanix Investor Relations website at ir.nutanix.com shortly
after the call.
Definitions and Total Revenue Impact
1Annual Contract Value, or ACV, is defined as the
total annualized value of a contract, excluding amounts related to
professional services and hardware. The total annualized value for
a contract is calculated by dividing the total value of the
contract by the number of years in the term of such contract,
using, where applicable, an assumed term of five years for
contracts that do not have a specified term. ACV Billings,
for any given period, is defined as the sum of the ACV for all
contracts billed during the given period.
2Annual Recurring Revenue, or ARR, for any given
period, is defined as the sum of ACV for all non life-of-device
contracts in effect as of the end of a specific period. For the
purposes of this calculation, we assume that the contract term
begins on the date a contract is booked, unless the terms of such
contract prevent us from fulfilling our obligations until a later
period, and irrespective of the periods in which we would recognize
revenue for such contract.
3Average Contract Term represents the dollar-weighted
term, calculated on a billings basis, across all subscription and
life-of-device contracts, using an assumed term of five years for
life-of-device licenses, executed in the period.
4Revenue was negatively impacted by a year-over-year decline in
the average contract term, including as a result of Nutanix’s
transition to a subscription-based business model.
Non-GAAP Financial Measures and Other Key Performance
Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with GAAP, this press release
includes the following non-GAAP financial and other key performance
measures: non-GAAP gross margin, non-GAAP operating expenses,
non-GAAP operating income (loss), non-GAAP operating margin, free
cash flow, Annual Contract Value Billings (or ACV Billings), Annual
Recurring Revenue (or ARR), and Average Contract Term. In computing
non-GAAP financial measures, we exclude certain items such as
stock-based compensation and the related income tax impact, costs
associated with our acquisitions (such as amortization of acquired
intangible assets, income tax-related impact, and other
acquisition-related costs), costs related to the impairment and
early exit of operating lease-related assets, restructuring
charges, litigation settlement accruals and legal fees related to
certain litigation matters, the change in fair value of the
derivative liability, the amortization of the debt discount and
issuance costs, interest expense related to convertible senior
notes, losses on debt extinguishment, gains on divestitures, and
other non-recurring transactions and the related tax impact.
Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP
operating income (loss), and non-GAAP operating margin are
financial measures which we believe provide useful information to
investors because they provide meaningful supplemental information
regarding our performance and liquidity by excluding certain
expenses and expenditures such as stock-based compensation expense
that may not be indicative of our ongoing core business operating
results. Free cash flow is a performance measure that we believe
provides useful information to our management and investors about
the amount of cash generated by the business after necessary
capital expenditures, and we define free cash flow as net cash
provided by (used in) operating activities less purchases of
property and equipment. ACV Billings is a performance measure that
we believe provides useful information to our management and
investors as it allows us to better track the topline growth of our
business during our transition to a subscription-based business
model because it takes into account variability in term lengths.
ARR is a performance measure that we believe provides useful
information to our management and investors as it allows us to
better track the topline growth of our subscription business
because it takes into account variability in term lengths. We use
these non-GAAP financial and key performance measures for financial
and operational decision-making and as a means to evaluate
period-to-period comparisons. However, these non-GAAP financial and
key performance measures have limitations as analytical tools and
you should not consider them in isolation or as substitutes for
analysis of our results as reported under GAAP. Non-GAAP gross
margin, non-GAAP operating expenses, non-GAAP operating income
(loss), non-GAAP operating margin, and free cash flow are not
substitutes for gross margin, operating expenses, operating income
or loss, operating margin, or net cash provided by (used in)
operating activities, respectively. There is no GAAP measure that
is comparable to ACV Billings, ARR, or Average Contract Term, so we
have not reconciled the ACV Billings, ARR, or Average Contract Term
data included in this press release to any GAAP measure. In
addition, other companies, including companies in our industry, may
calculate non-GAAP financial measures and key performance measures
differently or may use other measures to evaluate their
performance, all of which could reduce the usefulness of our
non-GAAP financial measures and key performance measures as tools
for comparison. We urge you to review the reconciliation of our
non-GAAP financial measures and key performance measures to the
most directly comparable GAAP financial measures included below in
the tables captioned “Reconciliation of GAAP to Non-GAAP Profit
Measures” and “Reconciliation of GAAP Net Cash Provided By
Operating Activities to Non-GAAP Free Cash Flow,” and not to rely
on any single financial measure to evaluate our business. This
press release also includes the following forward-looking non-GAAP
financial measures as part of our first quarter fiscal 2024 outlook
and/or our fiscal 2024 outlook: non-GAAP gross margin, non-GAAP
operating margin, and free cash flow. We are unable to reconcile
these forward-looking non-GAAP financial measures to their most
directly comparable GAAP financial measures without unreasonable
efforts, as we are currently unable to predict with a reasonable
degree of certainty the type and extent of certain items that would
be expected to impact the GAAP financial measures for these periods
but would not impact the non-GAAP financial measures.
Forward-Looking Statements
This press release contains express and implied forward-looking
statements, including, but not limited to, statements regarding:
our business plans, strategies, initiatives, vision, objectives,
and outlook (including our growth plan) as well as our ability to
execute thereon successfully and in a timely manner and the
benefits and impact thereof on our business, operations, and
financial results (including our first quarter fiscal 2024 outlook,
our fiscal 2024 outlook, and our plans for share repurchases); the
impact of our transition to a subscription-based business model,
our ability to manage, complete or realize the benefits of such
transition successfully and in a timely manner, and the short-term
and long-term impacts of such transition on our business,
operations and financial results; the competitive market, including
our competitive position and ability to compete effectively, the
competitive advantages of our products, our projections about our
market share and opportunity, and the effects of increased
competition in our market; our ability to attract new end customers
and retain and grow sales from our existing end customers; our
customer needs and our response to those needs; our ability to form
new, and maintain and strengthen existing, strategic alliances and
partnerships and address macroeconomic supply chain shortages,
including our relationships with our channel partners and original
equipment manufacturers, and the impact of any changes to such
relationships on our business, operations and financial results;
the benefits and capabilities of our platform, solutions, products,
services and technology, including the interoperability and
availability of our solutions with and on third-party platforms;
our plans and expectations regarding new solutions, products,
services, product features and technology, including those that are
still under development or in process; our plans regarding, and the
timing and success of, our customer, partner, industry, analyst,
investor and employee events and the impact thereof on our
business, operations, and financial results; and our decision to
use new or different metrics, or to make adjustments to the metrics
we use, to supplement our financial reporting, and the impact
thereof.
These forward-looking statements are not historical facts and
instead are based on our current expectations, estimates, opinions,
and beliefs. Consequently, you should not rely on these
forward-looking statements. The accuracy of these forward-looking
statements depends upon future events and involves risks,
uncertainties, and other factors, including factors that may be
beyond our control, that may cause these statements to be
inaccurate and cause our actual results, performance or
achievements to differ materially and adversely from those
anticipated or implied by such statements, including, among others:
failure to successfully implement or realize the full benefits of,
or unexpected difficulties or delays in successfully implementing
or realizing the full benefits of, our business plans, strategies,
initiatives, vision, and objectives; our ability to achieve,
sustain and/or manage future growth effectively; delays or
unexpected accelerations in our current and future business model
transitions; our ability to resolve the third-party software usage
matter within estimates; our ability to remediate the previously
disclosed material weakness; matters arising out of the previously
disclosed completed Audit Committee investigation (including
litigation and regulatory risks); the rapid evolution of the
markets in which we compete, including the introduction, or
acceleration of adoption of, competing solutions, including public
cloud infrastructure; failure to timely and successfully meet our
customer needs; delays in or lack of customer or market acceptance
of our new solutions, products, services, product features or
technology; macroeconomic or geopolitical uncertainty, including
supply chain issues; factors that could result in the significant
fluctuation of our future quarterly operating results, including,
among other things, anticipated changes to our revenue and product
mix, including changes as a result of our transition to a
subscription-based business model, the timing and magnitude of
orders, shipments and acceptance of our solutions in any given
quarter, our ability to attract new and retain existing
end-customers, changes in the pricing and availability of certain
components of our solutions, and fluctuations in demand and
competitive pricing pressures for our solutions, attrition among
sales representatives or other employees; issues related to
strategic alliances and partnerships; our ability to make share
repurchases, including the possibility that the share repurchase
program may be suspended or discontinued; and other risks detailed
in our Annual Report on Form 10-K for the fiscal year ended July
31, 2022 filed with the U.S. Securities and Exchange Commission, or
the SEC, on September 21, 2022, our Quarterly Report on Form 10-Q
for the fiscal quarter ended October 31, 2022 filed with the SEC on
December 7, 2022, our Quarterly Report on Form 10-Q for the fiscal
quarter ended January 31, 2023 filed with the SEC on May 24, 2023,
and our Quarterly Report on Form 10-Q for the fiscal quarter ended
April 30, 2023 filed with the SEC on June 2, 2023. Additional
information will also be set forth in our Annual Report on Form
10-K for the fiscal year ended July 31, 2023, which should be read
in conjunction with this press release and the financial results
included herein. Our SEC filings are available on the Investor
Relations section of our website at ir.nutanix.com and on the SEC's
website at www.sec.gov. These forward-looking statements speak only
as of the date of this press release and, except as required by
law, we assume no obligation, and expressly disclaim any
obligation, to update, alter or otherwise revise any of these
forward-looking statements to reflect actual results or subsequent
events or circumstances.
About Nutanix
Nutanix is a global leader in cloud software, offering
organizations a single platform for running apps and data across
clouds. With Nutanix, companies can reduce complexity and simplify
operations, freeing them to focus on their business outcomes.
Building on its legacy as the pioneer of hyperconverged
infrastructure, Nutanix is trusted by companies worldwide to power
hybrid multicloud environments consistently, simply, and
cost-effectively. Learn more at www.nutanix.com or follow us on
social media @nutanix.
© 2023 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix
logo, and all Nutanix product and service names mentioned herein
are registered trademarks or unregistered trademarks of Nutanix,
Inc. in the United States and other countries. Other brand names
and marks mentioned herein are for identification purposes only and
may be the trademarks of their respective holder(s). This press
release contains links to external websites that are not part of
Nutanix.com. Nutanix does not control these sites and disclaims all
responsibility for the content or accuracy of any external site.
Our decision to link to an external site should not be considered
an endorsement of any content on such a site.
NUTANIX, INC.
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
As of
July 31, 2022
July 31, 2023
(in thousands)
Assets
Current assets:
Cash and cash equivalents
$
402,850
$
512,929
Short-term investments
921,429
924,466
Accounts receivable, net
124,559
157,251
Deferred commissions—current
115,356
120,001
Prepaid expenses and other current
assets
93,787
147,087
Total current assets
1,657,981
1,861,734
Property and equipment, net
113,440
111,865
Operating lease right-of-use assets
118,740
93,554
Deferred commissions—non-current
252,234
237,990
Intangible assets, net
15,829
4,893
Goodwill
185,260
184,938
Other assets—non-current
22,265
31,941
Total assets
$
2,365,749
$
2,526,915
Liabilities and Stockholders’
Deficit
Current liabilities:
Accounts payable
$
44,931
$
29,928
Accrued compensation and benefits
149,811
143,679
Accrued expenses and other current
liabilities
59,568
109,269
Deferred revenue—current
720,993
823,665
Operating lease liabilities—current
39,801
29,567
Convertible senior notes, net—current
145,456
—
Total current liabilities
1,160,560
1,136,108
Deferred revenue—non-current
724,545
771,367
Operating lease
liabilities—non-current
89,782
68,940
Convertible senior notes, net
1,156,205
1,218,165
Other liabilities—non-current
35,161
39,754
Total liabilities
3,166,253
3,234,334
Stockholders’ deficit:
Common stock
6
6
Additional paid-in capital
3,583,928
3,930,668
Accumulated other comprehensive income
(6,076
)
(5,171
)
Accumulated deficit
(4,378,362
)
(4,632,922
)
Total stockholders’ deficit
(800,504
)
(707,419
)
Total liabilities and stockholders’
deficit
$
2,365,749
$
2,526,915
NUTANIX, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2022
2023
2022
2023
(in thousands, except per
share data)
Revenue:
Product
$
168,751
$
240,495
$
757,623
$
912,114
Support, entitlements and other
services
216,789
253,715
823,173
950,781
Total revenue
385,540
494,210
1,580,796
1,862,895
Cost of revenue:
Product (1)(2)
12,546
10,655
55,602
51,107
Support, entitlements and other services
(1)
67,346
69,803
265,554
281,080
Total cost of revenue
79,892
80,458
321,156
332,187
Gross profit
305,648
413,752
1,259,640
1,530,708
Operating expenses:
Sales and marketing (1)(2)
252,600
229,425
979,075
924,696
Research and development (1)
144,268
146,201
572,999
580,961
General and administrative (1)
42,547
49,473
166,418
232,201
Total operating expenses
439,415
425,099
1,718,492
1,737,858
Loss from operations
(133,767
)
(11,347
)
(458,852
)
(207,150
)
Other (expense) income, net
(11,273
)
4,261
(320,830
)
(26,435
)
Loss before provision for income taxes
(145,040
)
(7,086
)
(779,682
)
(233,585
)
Provision for income taxes
6,297
6,201
19,264
20,975
Net loss
$
(151,337
)
$
(13,287
)
$
(798,946
)
$
(254,560
)
Net loss per share attributable to Class A
and Class B common stockholders—basic and diluted (3)
$
(0.67
)
$
(0.06
)
$
(3.62
)
$
(1.09
)
Weighted average shares used in computing
net loss per share attributable to Class A and Class B common
stockholders—basic and diluted (3)
225,398
237,832
220,529
233,247
____________________
(1)
Includes the following stock-based
compensation expense:
Three Months Ended July
31,
Fiscal Year Ended July
31,
2022
2023
2022
2023
(in thousands)
Product cost of revenue
$
1,850
$
1,863
$
7,379
$
7,966
Support, entitlements and other services
cost of revenue
7,282
6,528
30,846
26,611
Sales and marketing
23,617
19,333
104,592
82,758
Research and development
34,050
31,957
143,759
139,073
General and administrative
13,349
12,911
56,670
55,337
Total stock-based compensation expense
$
80,148
$
72,592
$
343,246
$
311,745
(2)
Includes the following amortization of
intangible assets:
Three Months Ended July
31,
Fiscal Year Ended July
31,
2022
2023
2022
2023
(in thousands)
Product cost of revenue
$
3,367
$
2,091
$
13,579
$
9,870
Sales and marketing
651
111
2,604
827
Total amortization of intangible
assets
$
4,018
$
2,202
$
16,183
$
10,697
(3)
Effective January 3, 2022, all of the then
outstanding shares of Nutanix, Inc. Class B common stock were
automatically converted into the same number of shares of Nutanix,
Inc. Class A common stock.
NUTANIX, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Fiscal Year Ended July
31,
2022
2023
(in thousands)
Cash flows from operating
activities:
Net loss
$
(798,946
)
$
(254,560
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
87,952
76,388
Stock-based compensation
343,246
311,745
Change in fair value of derivative
liability
198,038
—
Loss on debt extinguishment
64,910
—
Amortization of debt discount and issuance
costs
40,233
42,636
Operating lease cost, net of accretion
36,905
35,357
Early exit of lease-related assets
597
(1,040
)
Gain on Frame divestiture
—
(10,957
)
Non-cash interest expense
19,270
19,757
Other
9,282
(11,388
)
Changes in operating assets and
liabilities:
Accounts receivable, net
60,998
(25,885
)
Deferred commissions
(24,170
)
9,599
Prepaid expenses and other assets
(36,166
)
(59,243
)
Accounts payable
(1,461
)
(9,600
)
Accrued compensation and benefits
(19,674
)
(6,027
)
Accrued expenses and other liabilities
5,457
53,191
Operating leases, net
(46,773
)
(40,257
)
Deferred revenue
127,845
142,687
Net cash provided by operating
activities
67,543
272,403
Cash flows from investing
activities:
Maturities of investments
1,058,116
965,040
Purchases of investments
(1,081,246
)
(955,330
)
Sales of investments
17,999
—
Proceeds from Frame divestiture
—
5,909
Purchases of property and equipment
(49,058
)
(65,404
)
Net cash used in investing activities
(54,189
)
(49,785
)
Cash flows from financing
activities:
Proceeds from sales of shares through
employee equity incentive plans
67,826
46,501
Taxes paid related to net share settlement
of equity awards
—
(10,214
)
Repayment of convertible notes
—
(145,704
)
Payments of debt extinguishment costs
(14,709
)
—
Proceeds from unwinding of convertible
note hedges
39,880
—
Payments for unwinding of warrants
(18,390
)
—
Proceeds from the issuance of convertible
notes, net of issuance costs
88,687
—
Repurchases of common stock
(58,570
)
—
Payment of finance lease obligations
(1,089
)
(3,292
)
Net cash provided by (used in) financing
activities
103,635
(112,709
)
Net increase in cash, cash equivalents and
restricted cash
$
116,989
$
109,909
Cash, cash equivalents and restricted
cash—beginning of period
288,873
405,862
Cash, cash equivalents and restricted
cash—end of period
$
405,862
$
515,771
Restricted cash (1)
3,012
2,842
Cash and cash equivalents—end of
period
$
402,850
$
512,929
Supplemental disclosures of cash flow
information:
Cash paid for income taxes
$
20,353
$
30,781
Supplemental disclosures of non-cash
investing and financing information:
Purchases of property and equipment
included in accounts payable and accrued and other liabilities
$
17,139
$
15,754
Finance lease liabilities arising from
obtaining right-of-use assets
$
10,491
$
13,240
____________________
(1)
Included within other assets—non-current
in the consolidated balance sheets.
Reconciliation of Revenue to
Billings
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2022
2023
2022
2023
(in thousands)
Total revenue
$
385,540
$
494,210
$
1,580,796
$
1,862,895
Change in deferred revenue
12,580
50,631
127,845
142,687
Total billings
$
398,120
$
544,841
$
1,708,641
$
2,005,582
Disaggregation of Revenue and
Billings
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2022
2023
2022
2023
(in thousands)
Disaggregation of revenue:
Subscription revenue
$
350,632
$
459,460
$
1,433,773
$
1,730,848
Non-portable software revenue
11,447
10,379
49,694
37,382
Hardware revenue
340
351
5,585
2,824
Professional services revenue
23,121
24,020
91,744
91,841
Total revenue
$
385,540
$
494,210
$
1,580,796
$
1,862,895
Disaggregation of billings:
Subscription billings
$
364,113
$
504,191
$
1,563,560
$
1,868,943
Non-portable software billings
11,447
10,379
49,694
37,382
Hardware billings
340
351
5,585
2,824
Professional services billings
22,220
29,920
89,802
96,433
Total billings
$
398,120
$
544,841
$
1,708,641
$
2,005,582
Subscription — Subscription revenue includes any performance
obligation which has a defined term, and is generated from the
sales of software entitlement and support subscriptions,
subscription software licenses and cloud-based Software as a
Service, or SaaS offerings.
- Ratable — We recognize revenue from software entitlement and
support subscriptions and SaaS offerings ratably over the
contractual service period, the substantial majority of which
relate to software entitlement and support subscriptions.
- Upfront — Revenue from our subscription software licenses is
generally recognized upfront upon transfer of control to the
customer, which happens when we make the software available to the
customer.
Non-portable software — Non-portable software revenue includes
sales of our enterprise cloud platform when delivered on a
configured-to-order appliance by us or one of our OEM partners. The
software licenses associated with these sales are typically
non-portable and have a term equal to the life of the appliance on
which the software is delivered. Revenue from our non-portable
software products is generally recognized upon transfer of control
to the customer.
Hardware — In transactions where we deliver the hardware
appliance, we consider ourselves to be the principal in the
transaction and we record revenue and costs of goods sold on a
gross basis. We consider the amount allocated to hardware revenue
to be equivalent to the cost of the hardware procured. Hardware
revenue is generally recognized upon transfer of control to the
customer.
Professional services — We also sell professional services with
our products. We recognize revenue related to professional services
as they are performed.
Annual Contract Value Billings
and Annual Recurring Revenue
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2022
2023
2022
2023
(in thousands)
Annual Contract Value Billings (ACV
Billings)
$
193,197
$
278,699
$
756,326
$
956,810
Annual Recurring Revenue (ARR)
$
1,202,438
$
1,561,981
$
1,202,438
$
1,561,981
Reconciliation of Subscription
and Professional Services Revenue to Subscription and Professional
Services Billings
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2022
2023
2022
2023
(in thousands)
Subscription revenue
$
350,632
$
459,460
$
1,433,773
$
1,730,848
Change in subscription deferred
revenue
13,481
44,731
129,787
138,095
Subscription billings
$
364,113
$
504,191
$
1,563,560
$
1,868,943
Professional services revenue
$
23,121
$
24,020
$
91,744
$
91,841
Change in professional services deferred
revenue
(901
)
5,900
(1,942
)
4,592
Professional services billings
$
22,220
$
29,920
$
89,802
$
96,433
Reconciliation of GAAP to
Non-GAAP Profit Measures
(Unaudited)
GAAP
Non-GAAP Adjustments
Non-GAAP
Three Months Ended July 31,
2023
(1)
(2)
(3)
(4)
(5)
(6)
Three Months Ended July 31,
2023
(in thousands, except
percentages and per share data)
Gross profit
$
413,752
$
8,391
$
2,091
$
—
$
—
$
—
$
—
$
424,234
Gross margin
83.7
%
1.7
%
0.4
%
—
—
—
—
85.8
%
Operating expenses:
Sales and marketing
229,425
(19,333
)
(111
)
—
—
—
—
209,981
Research and development
146,201
(31,957
)
—
—
—
—
—
114,244
General and administrative
49,473
(12,911
)
—
(176
)
—
—
—
36,386
Total operating expenses
425,099
(64,201
)
(111
)
(176
)
—
—
—
360,611
(Loss) income from operations
(11,347
)
72,592
2,202
176
—
—
—
63,623
Operating margin
(2.3
)%
14.8
%
0.4
%
—
—
—
—
12.9
%
Net (loss) income
$
(13,287
)
$
72,592
$
2,202
$
176
$
16,307
$
(10,957
)
$
503
$
67,536
Weighted shares outstanding, basic
237,832
237,832
Weighted shares outstanding, diluted
(7)
237,832
286,033
Net (loss) income per share, basic
$
(0.06
)
$
0.31
$
0.01
$
-
$
0.07
$
(0.05
)
$
-
$
0.28
Net (loss) income per share, diluted
$
(0.06
)
$
0.24
____________________
(1)
Stock-based compensation expense
(2)
Amortization of intangible assets
(3)
Litigation settlement accrual and legal
fees
(4)
Amortization of debt discount and issuance
costs and interest expense related to convertible senior notes
(5)
Gain on Frame divestiture
(6)
Income tax effect primarily related to
stock-based compensation expense
(7)
Includes 48,201 potentially dilutive
shares related to convertible senior notes and the issuance of
shares under employee equity incentive plans
GAAP
Non-GAAP Adjustments
Non-GAAP
Fiscal Year Ended July 31,
2023
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Fiscal Year Ended July 31,
2023
(in thousands, except
percentages and per share data)
Gross profit
$
1,530,708
$
34,577
$
9,870
$
—
$
230
$
—
$
—
$
—
$
—
$
1,575,385
Gross margin
82.2
%
1.9
%
0.5
%
—
—
—
—
—
—
84.6
%
Operating expenses:
Sales and marketing
924,696
(82,758
)
(827
)
—
(3,283
)
—
—
—
—
837,828
Research and development
580,961
(139,073
)
—
—
(1,661
)
—
—
—
—
440,227
General and administrative
232,201
(55,337
)
—
(1,726
)
(129
)
(38,675
)
—
—
—
136,334
Total operating expenses
1,737,858
(277,168
)
(827
)
(1,726
)
(5,073
)
(38,675
)
—
—
—
1,414,389
(Loss) income from operations
(207,150
)
311,745
10,697
1,726
5,303
38,675
—
—
—
160,996
Operating margin
(11.1
)%
16.6
%
0.6
%
0.1
%
0.3
%
2.1
%
—
—
—
8.6
%
Net (loss) income
$
(254,560
)
$
311,745
$
10,697
$
1,726
$
5,303
$
38,675
$
64,112
$
(10,957
)
$
2,219
$
168,960
Weighted shares outstanding, basic
233,247
233,247
Weighted shares outstanding, diluted
(9)
233,247
281,787
Net (loss) income per share, basic
$
(1.09
)
$
1.33
$
0.05
$
0.01
$
0.02
$
0.17
$
0.27
$
(0.05
)
$
0.01
$
0.72
Net (loss) income per share, diluted
$
(1.09
)
$
0.60
____________________
(1)
Stock-based compensation expense
(2)
Amortization of intangible assets
(3)
Costs related to early exit of existing
leases
(4)
Restructuring charges
(5)
Litigation settlement accrual and legal
fees
(6)
Amortization of debt discount and issuance
costs and interest expense related to convertible senior notes
(7)
Gain on Frame divestiture
(8)
Income tax effect primarily related to
stock-based compensation expense
(9)
Includes 48,540 potentially dilutive
shares related to convertible senior notes and the issuance of
shares under employee equity incentive plans
GAAP
Non-GAAP Adjustments
Non-GAAP
Three Months Ended July 31,
2022
(1)
(2)
(3)
(4)
(5)
(6)
Three Months Ended July 31,
2022
(in thousands, except
percentages and per share data)
Gross profit
$
305,648
$
9,132
$
3,367
$
—
$
218
$
—
$
—
$
318,365
Gross margin
79.3
%
2.4
%
0.9
%
—
—
—
—
82.6
%
Operating expenses:
Sales and marketing
252,600
(23,617
)
(651
)
—
(10,281
)
—
—
218,051
Research and development
144,268
(34,050
)
—
—
(633
)
—
—
109,585
General and administrative
42,547
(13,349
)
—
(597
)
(43
)
—
—
28,558
Total operating expenses
439,415
(71,016
)
(651
)
(597
)
(10,957
)
—
—
356,194
Loss from operations
(133,767
)
80,148
4,018
597
11,175
—
—
(37,829
)
Operating margin
(34.7
)%
20.8
%
1.0
%
0.2
%
2.9
%
—
—
(9.8
)%
Net loss
$
(151,337
)
$
80,148
$
4,018
$
597
$
11,175
$
15,524
$
1,033
$
(38,842
)
Weighted shares outstanding, basic and
diluted
225,398
225,398
Net loss per share, basic and diluted
$
(0.67
)
$
0.36
$
0.02
$
-
$
0.05
$
0.07
$
-
$
(0.17
)
____________________
(1)
Stock-based compensation expense
(2)
Amortization of intangible assets
(3)
Costs related to early exit of existing
leases
(4)
Restructuring charges
(5)
Amortization of debt discount and issuance
costs and interest expense related to convertible senior notes
(6)
Income tax effect primarily related to
stock-based compensation expense
GAAP
Non-GAAP Adjustments
Non-GAAP
Fiscal Year Ended July 31,
2022
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Fiscal Year Ended July 31,
2022
(in thousands, except
percentages and per share data)
Gross profit
$
1,259,640
$
38,225
$
13,579
$
—
$
218
$
—
$
—
$
—
$
—
$
—
$
1,311,662
Gross margin
79.7
%
2.4
%
0.9
%
—
—
—
—
—
—
—
83.0
%
Operating expenses:
Sales and marketing
979,075
(104,592
)
(2,604
)
—
(10,281
)
—
—
—
—
—
861,598
Research and development
572,999
(143,759
)
—
—
(633
)
—
—
—
—
—
428,607
General and administrative
166,418
(56,670
)
—
(597
)
(43
)
(432
)
—
—
—
—
108,676
Total operating expenses
1,718,492
(305,021
)
(2,604
)
(597
)
(10,957
)
(432
)
—
—
—
—
1,398,881
Loss from operations
(458,852
)
343,246
16,183
597
11,175
432
—
—
—
—
(87,219
)
Operating margin
(29.0
)%
21.8
%
1.0
%
—
0.7
%
—
—
—
—
—
(5.5
)%
Net loss
$
(798,946
)
$
343,246
$
16,183
$
597
$
11,175
$
432
$
198,038
$
60,731
$
64,910
$
786
$
(102,848
)
Weighted shares outstanding, basic and
diluted
220,529
220,529
Net loss per share, basic and diluted
$
(3.62
)
$
1.56
$
0.07
$
-
$
0.05
$
-
$
0.90
$
0.28
$
0.29
$
-
$
(0.47
)
____________________
(1)
Stock-based compensation expense
(2)
Amortization of intangible assets
(3)
Costs related to early exit of existing
leases
(4)
Restructuring charges
(5)
Other
(6)
Change in fair value of derivative
liability
(7)
Amortization of debt discount and issuance
costs and interest expense related to convertible senior notes
(8)
Loss on debt extinguishment
(9)
Income tax effect primarily related to
stock-based compensation expense and release of acquisition-related
unrecognized tax positions
Reconciliation of GAAP Net
Cash Provided by Operating Activities to Non-GAAP Free Cash
Flow
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2022
2023
2022
2023
(in thousands)
Net cash provided by operating
activities
$
38,004
$
58,309
$
67,543
$
272,403
Purchases of property and equipment
(14,779
)
(12,801
)
(49,058
)
(65,404
)
Free cash flow
$
23,225
$
45,508
$
18,485
$
206,999
Correction to Prior Period Financial
Statements (Unaudited)
The prior period amounts included in the tables above reflect
the corrections made as a result of the previously disclosed
investigation related to third-party software usage. Prior period
amounts have been corrected as follows:
As of July 31, 2022
As Previously Reported
Adjustments
As Corrected
(in thousands)
Consolidated Balance Sheet:
Accrued expenses and other current
liabilities
$
49,232
$
10,336
$
59,568
Total current liabilities
$
1,150,224
$
10,336
$
1,160,560
Total liabilities
$
3,155,917
$
10,336
$
3,166,253
Accumulated deficit
$
(4,368,026
)
$
(10,336
)
$
(4,378,362
)
Total stockholders’ deficit
$
(790,168
)
$
(10,336
)
$
(800,504
)
Three Months Ended July 31,
2022
As Previously Reported
Adjustments
As Corrected
(in thousands)
Consolidated Statement of
Operations:
Sales and marketing
$
252,508
$
92
$
252,600
Research and development
$
144,013
$
255
$
144,268
Total operating expenses
$
439,068
$
347
$
439,415
Loss from operations
$
(133,420
)
$
(347
)
$
(133,767
)
Loss before provision for income taxes
$
(144,693
)
$
(347
)
$
(145,040
)
Net loss
$
(150,990
)
$
(347
)
$
(151,337
)
Net loss per share attributable to Class A
and Class B common stockholders—basic and diluted
$
(0.67
)
$
—
$
(0.67
)
Fiscal Year Ended July 31,
2022
As Previously Reported
Adjustments
As Corrected
(in thousands)
Consolidated Statement of
Operations:
Sales and marketing
$
978,704
$
371
$
979,075
Research and development
$
571,962
$
1,037
$
572,999
Total operating expenses
$
1,717,084
$
1,408
$
1,718,492
Loss from operations
$
(457,444
)
$
(1,408
)
$
(458,852
)
Loss before provision for income taxes
$
(778,274
)
$
(1,408
)
$
(779,682
)
Net loss
$
(797,538
)
$
(1,408
)
$
(798,946
)
Net loss per share attributable to Class A
and Class B common stockholders—basic and diluted
$
(3.62
)
$
—
$
(3.62
)
Fiscal Year Ended July 31,
2022
As Previously Reported
Adjustments
As Corrected
(in thousands)
Consolidated Statement of Cash
Flows:
Net loss
$
(797,538
)
$
(1,408
)
$
(798,946
)
Accrued expenses and other liabilities
$
4,049
$
1,408
$
5,457
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230831898036/en/
Investor Contact: Richard Valera ir@nutanix.com
Media Contact: Jennifer Massaro pr@nutanix.com
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