Pivotal had incurred a net loss in each year since formation and as of May 3, 2019, the company had an accumulated deficit of $1.32 billion. The operating expenses are likely to increase significantly in the future due to additional hiring, strategic investments, scale relationships with ecosystem partners, and open new offices.
The company’s ability to increase sales of PCF and Labs depends on growth in its target markets, which include the markets for cloud application infrastructure, Platform-as-service and application infrastructure, middleware and development solutions. Pivotal’s future growth depends in part on customers renewing their subscriptions and expanding their use of its platform.
Analysts expect the company to report a loss of $0.04 per share on revenue of $186.57 million for the second quarter. In comparison, during the previous year quarter, Pivotal posted a loss of $0.06 per share on revenue of $164.41 million. The company has surprised investors by beating analysts’ expectations in all of the past four quarters.
For the first quarter, Pivotal reported a narrower loss helped by a 19% growth in the total revenues. The company was beneficial from the 43% subscription growth and customer expansions that continued to fuel its strong net expansion rate of 143% while the sales execution and a complex technology landscape impacted the quarter.
For the second quarter, the company expects total revenues in the range of $185 million to $189 million, subscription revenue of $131 million to $133 million, and adjusted loss in the range of $0.04 to $0.03 per share. For fiscal 2020, the company predicts total revenue in the range of $756 million to $767 million, subscription revenue of $530 million to $538 million, and adjusted loss in the range of $0.15 to $0.13 per share.