Nutanix (NTNX) to report Q2 earnings on Wednesday – what’s in the offing?

Nutanix, Inc. (NASDAQ: NTNX) has been striving to end the ongoing losing streak and return to profitability while making progress in its transformation into a subscription-based business. After winning several new customers in the initial months of 2020, the cloud computing company is set to publish second-quarter results on Wednesday at 4:00 pm ET.

It is widely expected that Nutanix would report a wider loss of $0.69 per share on revenues of $341.12 million for the second quarter, which is broadly in line with the management’s projection. The adoption of the new business model is unlikely to have any positive impact on the upcoming results, due to delay in revenue recognition.

Outlook

There has been steady improvement in bottom-line performance sequentially in the recent quarters – though the company remained in loss – which is expected to continue this time.

The top-line is estimated to have benefited from the portfolio revamp, which was supported by intense promotional activity. Going forward, investor sentiment might get a strong boost from the ongoing improvement in revenue performance. Also, the efforts to expand the SME business overseas and forge partnerships in key markets should help the company return to profitability in the long term.

Competition

Nutanix hopes that its expertise in the hyper-converged infrastructure technology will help it stay ahead of rivals. By offering high levels of flexibility and convenience, the technology has been transforming the way data-centers are built and operated.

Nutanix’s competitor Hewlett Packard Enterprise (HPE) will be unveiling its first-quarter numbers on March 3 after the regular trading hours. Among others, VMWare (VMW) will be publishing results for its most recent quarter on Thursday evening.

Looking Back

For the first quarter, Nutanix reported a wider loss, mainly due to a sharp increase in operating expenses. At $315 million, revenues were broadly unchanged from the year-ago quarter. The results came in above the consensus estimates.

Also see: Nutanix Q1 2020 Earnings Conference Call Transcript

Nutanix shares, which gained 11% since the beginning of the year, closed the last session broadly at the levels seen a year ago. The stock pared its recent gains this week and traded lower ahead of the earnings release.

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