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Nutanix posts narrower-than-expected Q1 loss

Nutanix Inc. (NTNX) reported a wider loss in the first quarter due to higher operating expenses. The bottom line came in narrower than analysts’ expectations while the top line exceeded consensus estimates. The company guided second-quarter loss below consensus view.

Net loss widened to $94.3 million or $0.54 per share from $61.5 million or $0.39 per share in the previous year quarter. On a non-GAAP basis, net loss narrowed to $0.13 per share from $0.16 per share a year ago.

Revenue for the quarter jumped 13.7% to $313.3 million. This reflects the elimination of about $104 million in pass-through hardware revenue in the latest quarter as the company nears the completion of its shift toward rising software revenue.

Looking ahead into the second quarter, the company expects revenue in the range of $325 million to $335 million. Adjusted loss is anticipated to be about $0.25 per share, using about 180 million weighted shares outstanding.

An infographic on Nutanix's first quarter 2019 earnings results
Nutanix Q1 2019 Earnings Infographic

Billings are predicted to be in the range of $410 million to $420 million for the second quarter. Adjusted gross margin is anticipated to be between 78% and 79% while adjusted operating expenses are projected to be $300 million to $310 million.

For the first quarter, billings increased 21.7% to $383.6 million. This reflects the elimination of about $104 million in pass-through hardware revenue in the first quarter of fiscal 2019, up from $8 million last year, as a shift toward increasing software revenue is nearing completion.

Software and support revenue for the first quarter soared 44% to $280.7 million from the previous year quarter. Software and support billings jumped 50% to $351 million. Deferred revenue surged 72% year-over-year to $701.8 million.

Red Hat stock falls as Q2 revenue disappoints; earnings top estimates

The company said 51% of its billings were derived from subscriptions, up from 31% last year and its subscription revenue grew 104% year-over-year. Nutanix expects to continue the shift towards subscription, driving a cloud-like, pay-as-you-grow business model.

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Nutanix ended the first quarter with 11,490 end-customers. The results included deals with ABN AMRO Clearing Bank, AccorHotels, Airbus, Inchcape plc, JSE Limited, Shinsei Bank, and Wintrust Financial Corp.

Shares of Nutanix ended Tuesday’s regular session down 1.80% at $40.97 on the Nasdaq. The stock has risen over 16% in the year so far and over 18% in the past year.

 

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