Nutanix, Inc. announced financial results for its first quarter ended October 31, 2020.
“We are pleased with our financial performance in the first quarter, which marked a strong start to fiscal 2021 including increased adoption of new products as well as continued growth in our core hyperconverged infrastructure software,” said Dheeraj Pandey, Chairman, Co-Founder and CEO of Nutanix. “After launching our solutions on AWS in August, we announced a major partnership with Microsoft to develop our portfolio on Azure, placing the Nutanix HCI (Hybrid Cloud Infrastructure) at a significant competitive advantage to help our customers build out their hybrid and multicloud environments.”
“Our ACV-first strategy and solid go-to-market execution drove outperformance across all key financial metrics including ACV billings growth of 10 percent year-over-year and run-rate ACV growth of 29 percent year-over-year,” said Duston Williams, CFO of Nutanix. “Looking ahead, we remain focused on thoughtfully managing operating expenses as we continue to execute on our business model transformation and are confident in Nutanix’s ability to drive long-term growth for the benefit of all stakeholders.”
First Quarter Fiscal 2021 Financial Summary
Q1 FY’21 Q1 FY’20 Y/Y Change
Annual Contract Value (ACV)1 Billings $137.8 million $125.6 million 10%
Run-rate Annual Contract Value (ACV) $1.29 billion $1.00 billion 29%
Total Average Contract Term 3.5 years 3.9 years (0.4) years
Total Revenue $312.8 million $314.8 million (0.6)%
GAAP Gross Margin 78.3% 77.1% 120 bps
Non-GAAP Gross Margin 81.9% 80.1% 180 bps
GAAP Operating Expenses $426.9 million $462.9 million (8)%
Non-GAAP Operating Expenses $341.2 million $386.3 million (12)%
Free Cash Flow $(16.3) million $(44.4) million $28 million
Reconciliations between GAAP and non-GAAP financial measures and key performance measures are provided in the tables of this press release.
Recent Company Highlights
- Entered into a Partnership with Microsoft Azure: Nutanix announced a new partnership with Microsoft that will enable both companies to deliver a hybrid cloud solution with seamless application, data, and license mobility as well as unified management across on-premises and Azure environments, using Nutanix HCI (Hybrid Cloud Infrastructure) on Azure.
- Reset the Bar for Innovation in Hyperconverged Infrastructure Market: Nutanix introduced major new capabilities in its popular hyperconverged infrastructure software, delivering significant innovation to datacenter and cloud customers, which will result in up to 50% faster performance, easier cloud deployments with native virtual networking, simplified Zero-Trust security, and expanded automation and budgeting capabilities for cloud resources.
- Expanded Innovation Including Launch of Karbon Container Technology: Additional innovation during the quarter continued in both the core platform and new products with announcements about new capabilities added to the hyperconverged infrastructure software platform, significant updates to the Database-as-a-Service solution (Era), as well as the launch of a new Kubernetes-based PaaS solution (Karbon Platform Services) to democratize containers beyond DevOps for IT operators, building on the AHV revolution to revolutionize hypervisors.
- Introduced New Cloud Partner Program: Nutanix announced Elevate, a new global partner program, to simplify engagement for Nutanix’s entire partner ecosystem using a consistent set of tools, resources, and marketing platforms to take advantage of cloud business models. Under one integrated architecture, Elevate enables Value Added Resellers, Value Added Distributors, Service Providers and Telcos, Hyperscalers, Independent Software, Hardware, and Platform Vendors, Global System Integrators, and Services Delivery Partners to grow their business with hybrid and multicloud solutions.
- Launched the Third Annual Enterprise Cloud Index, Showing Importance of Hybrid Cloud: For the third year, Nutanix partnered with a leading third-party research firm to analyze key trends and priorities in the industry. This year, the survey also provided a window into companies’ responses to COVID-19 and how it affected spending priorities. The research showed that IT leaders overwhelmingly (86%) continue to see hybrid cloud as the ideal deployment model, and that companies are taking important steps in their digital transformation journey including deploying hyperconverged infrastructure.
- Expanded New Customer Base and New Business with Existing Customers: Despite the ongoing pandemic, Nutanix continued to add new customers, ending the first quarter of fiscal 2021 with a total of 18,040 end-customers. Further, Nutanix saw increased demand from new and existing customers for both new products and new workloads. First quarter customer wins included the following Global 2000 companies: Allianz (China) Insurance Holding Co., Ltd, CaixaBank, HCL Technologies Limited, Nomura Research Institute, Ltd., Royal Vopak, Teleperformance Colombia, and more.
- Transformed .NEXT to Digital Experience: Nutanix held its largest ever .NEXT user conference this year, 100% virtually, with record attendance of over 40,000 prospects, customers and partners across multiple time zones and languages, resulting in a record weekly number of Test Drives and product trials. In addition, .NEXT is on track to deliver strong pipeline generation at a significantly lower cost than in-person events.
Second Quarter Fiscal 2021 Outlook
Q2 FY’21 Outlook
ACV Billings $145-$148 million
Non-GAAP Gross Margin Approximately 81.5%
Non-GAAP Operating Expenses $360-$370 million
Weighted Shares Outstanding Approximately 202 million
Supplementary materials to this press release, including our first quarter fiscal year 2021 earnings presentation, can be found at https://ir.nutanix.com/company/financial.
