Reports 27% YoY ACV Billings Growth and
Achieves Positive Free Cash Flow for Fiscal 2022
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, 2022.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220831005217/en/
Nutanix Q4 and Fiscal 2022 Earnings
Summary (Graphic: Business Wire)
“Our fourth quarter capped off a fiscal year that showed strong
year-over-year top and bottom line improvement,” said Rajiv
Ramaswami, President and CEO of Nutanix. “Fiscal 2022 was an
important data point in demonstrating the long-term benefits of our
subscription business model transition. We expect these benefits to
compound further in the coming years as renewals become a bigger
share of our business.”
“Our Fiscal 2022 results reflect strong progress on our
subscription model with 27% year-over-year ACV billings growth and
achievement of positive free cash flow, which we expect to be
sustainable on an annual basis,” said Rukmini Sivaraman, CFO of
Nutanix. “We continue to see good execution on our building base of
subscription renewals and remain focused on driving towards
profitable growth.”
Fourth Quarter Fiscal 2022 Financial
Summary
Q4 FY’22
Q4 FY’21
Y/Y Change
Annual Contract Value (ACV)1
Billings
$193.2 million
$176.3 million
10%
Annual Recurring Revenue
(ARR)2
$1.20 billion
$878.7 million
37%
Average Contract Term3
3.2 years
3.4 years
(0.2) year
Revenue4
$385.5 million
$390.7 million
(1)%
GAAP Gross Margin
79.3%
79.9%
(60) bps
Non-GAAP Gross Margin
82.6%
82.9%
(30) bps
GAAP Operating Expenses
$439.1 million
$454.1 million
(3)%
Non-GAAP Operating Expenses
$355.8 million
$372.5 million
(4)%
Free Cash Flow
$23.2 million
$(42.2) million
$65.4 million
Fiscal 2022 Financial Summary
FY’22
FY’21
Y/Y Change
Annual Contract Value (ACV)1 Billings
$756.3 million
$594.3 million
27%
Annual Recurring Revenue (ARR)2
$1.20 billion
$878.7 million
37%
Average Contract Term3
3.2 years
3.4 years
(0.2) year
Revenue4
$1.58 billion
$1.39 billion
13%
GAAP Gross Margin
79.7%
79.1%
60 bps
Non-GAAP Gross Margin
83.0%
82.3%
70 bps
GAAP Operating Expenses
$1.72 billion
$1.76 billion
(3)%
Non-GAAP Operating Expenses
$1.40 billion
$1.43 billion
(2)%
Free Cash Flow
$18.5 million
$(158.5) million
$177.0 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
- Appointed Andrew Brinded as Chief Revenue Officer:
Nutanix announced the appointment of Andrew Brinded as Chief
Revenue Officer on August 1, 2022. Andrew has been a Nutanix sales
leader for over five years, previously having served as Senior Vice
President & Worldwide Sales Chief Operating Officer, where he
led global sales strategy and operations.
- Released its Second ESG Report: The report is available
in the ESG section of the Nutanix Investor Relations website or can
be accessed directly here.
- Released Latest Version of Nutanix Hybrid Cloud
Infrastructure Software: The AOS™ 6.5 release is a
comprehensive and feature-rich update for Nutanix’s core
hyperconverged infrastructure software, delivering improved
performance, security, and integrated data services.
- Announced Nutanix Cloud Clusters (NC2) on Microsoft Azure
Progressed to Public Preview: This will significantly increase
the number of customers who will have access to NC2 on Azure in the
near term.
- Named the 2022 HPE GreenLake Ecosystem Partner of the
Year
First Quarter Fiscal 2023
Outlook
ACV Billings
$210 - $215 million
Revenue
$410 - $415 million
Non-GAAP Gross Margin
Approximately 82%
Non-GAAP Operating Expenses
$360 - $365 million
Non-GAAP Operating Margin
Approximately (6)%
Weighted Average Shares
Outstanding
Approximately 229 million
Fiscal 2023 Outlook
ACV Billings
$895 - $900 million
Revenue
$1.77 - $1.78 billion
Non-GAAP Gross Margin
Approximately 82%
Non-GAAP Operating Expenses
$1.41 - $1.42 billion
Non-GAAP Operating Margin
Approximately 2%
Supplementary materials to this press release, including our
fourth quarter and fiscal 2022 earnings presentation, can be found
at https://ir.nutanix.com/company/financial.
Webcast and Conference Call Information
Nutanix executives will discuss the Company’s fourth quarter and
fiscal 2022 financial results on a conference call at 4:30 p.m.
Eastern Time/1:30 p.m. Pacific Time. To listen to the call via
telephone, dial +1-833-470-1428 from within the United States or
+1-404-975-4839 from outside the United States. The access code is
494054. This call will be webcast live and available to all
interested parties on our Investor Relations website at
ir.nutanix.com. Shortly after the conclusion of the conference
call, a replay of the audio webcast will be available on our
Investor Relations website. A telephonic replay will be available
for one week and can be accessed by calling 1-844-200-6205 or
1-646-904-5544, and entering the access code 587980.
Definitions and Total Revenue Impact
1 Annual 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. ACV Billings is the sum
of New ACV Billings and Renewals ACV Billings.
2 Annual 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.
3 Average 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.
4 Revenue was negatively impacted by a year-over-year decline in
the average contract term associated with Nutanix’s ongoing
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: billings, non-GAAP gross margin, non-GAAP operating
expenses, free cash flow, Annual Contract Value Billings (or ACV
Billings), Annual Recurring Revenue (or ARR), Run-rate Annual
Contract Value (or Run-rate ACV) and Average Contract Term. In
computing these 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), impairment (recovery)
and early exit of operating lease-related assets, restructuring
charges, 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, loss on debt
extinguishment, and other non-recurring transactions and the
related tax impact. Billings is a performance measure which we
believe provides useful information to investors because it
represents the amounts under binding purchase orders received by us
during a given period that have been billed, and we calculate
billings by adding the change in deferred revenue between the start
and end of the period to total revenue recognized in the same
period. Non-GAAP gross margin and non-GAAP operating expenses 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 and Run-rate ACV are
performance measures that we believe provide useful information to
our management and investors as they allow us to better track the
topline growth of our business during our transition to a
subscription-based business model because they take 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.
Billings, non-GAAP gross margin, non-GAAP operating expenses, and
free cash flow are not substitutes for total revenue, gross margin,
operating expenses, or net cash provided by (used in) operating
activities, respectively. There is no GAAP measure that is
comparable to ACV Billings, ARR, Run-rate ACV, or Average Contract
Term, so we have not reconciled the ACV Billings, ARR, Run-rate
ACV, 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
Revenue to Billings,” “Disaggregation of Revenue and Billings,”
“Reconciliation of GAAP to Non-GAAP Profit Measures,” and
“Reconciliation of GAAP Net Cash Provided By (Used In) Operating
Activities to Non-GAAP Free Cash Flow,” and not to rely on any
single financial measure to evaluate our business.
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 2023 outlook,
our fiscal 2023 outlook, our expectations regarding the benefits of
our subscription business model transition, the sustainability of
positive free cash flow on an annual basis, our focus on driving
towards profitable growth, and the increase in the number of
customers who will have access to NC2 on Azure); our plans for, and
the timing of, any current and future business model transitions,
including our ongoing transition to a subscription-based business
model, our ability to manage, complete or realize the benefits of
such transitions successfully and in a timely manner, and the
short-term and long-term impacts of such transitions 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; the timing and potential impact of the COVID-19 pandemic
on the global market environment and the IT industry, as well as on
our business, operations and financial results, including the
changes we have made or anticipate making in response to the
COVID-19 pandemic, our ability to manage our business during the
pandemic, and the position we anticipate being in following the
pandemic; 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; 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 conditions, including supply chain issues; the
timing, breadth, and impact of the COVID-19 pandemic on our
business, operations, and financial results, as well as the impact
on our customers, partners, and end markets; 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,
which will slow revenue growth during such transition and make
forecasting future performance more difficult, 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; and other risks detailed
in our Annual Report on Form 10-K for the fiscal year ended July
31, 2021 filed with the U.S. Securities and Exchange Commission, or
the SEC, on September 21, 2021 and our Quarterly Reports on Form
10-Q for the fiscal quarters ended October 31, 2021, January 31,
2022 and April 30, 2022 filed with the SEC on December 2, 2021,
March 10, 2022, and June 2, 2022, respectively. Additional
information will also be set forth in our Annual Report on Form
10-K for the fiscal year ended July 31, 2022, 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 and a pioneer in
hyperconverged infrastructure solutions, making clouds invisible,
freeing customers to focus on their business outcomes.
Organizations around the world use Nutanix software to leverage a
single platform to manage any app at any location for their hybrid
multicloud environments. Learn more at www.nutanix.com or follow us
on social media @nutanix.
© 2022 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, 2021
July 31, 2022
(in thousands)
Assets
Current assets:
Cash and cash equivalents
$
285,723
$
402,850
Short-term investments
928,006
921,429
Accounts receivable, net
180,781
124,559
Deferred commissions—current
110,935
115,356
Prepaid expenses and other current
assets
56,816
93,787
Total current assets
1,562,261
1,657,981
Property and equipment, net
131,621
113,440
Operating lease right-of-use assets
105,903
118,740
Deferred commissions—non-current
232,485
252,234
Intangible assets, net
32,012
15,829
Goodwill
185,260
185,260
Other assets—non-current
27,954
22,265
Total assets
$
2,277,496
$
2,365,749
Liabilities and Stockholders’
Deficit
Current liabilities:
Accounts payable
$
47,056
$
44,931
Accrued compensation and benefits
162,337
149,811
Accrued expenses and other current
liabilities
39,404
49,232
Deferred revenue—current
636,421
720,993
Operating lease liabilities—current
42,670
39,801
Convertible senior notes, net—current
—
145,456
Total current liabilities
927,888
1,150,224
Deferred revenue—non-current
676,502
724,545
Operating lease
liabilities—non-current
86,599
89,782
Convertible senior notes, net
1,055,694
1,156,205
Derivative liability
500,175
—
Other liabilities—non-current
42,679
35,161
Total liabilities
3,289,537
3,155,917
Stockholders’ deficit:
Common stock
5
6
Additional paid-in capital
2,615,317
3,583,928
Accumulated other comprehensive income
(8
)
(6,076
)
Accumulated deficit
(3,627,355
)
(4,368,026
)
Total stockholders’ deficit
(1,012,041
)
(790,168
)
Total liabilities and stockholders’
deficit
$
2,277,496
$
2,365,749
NUTANIX, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2021
2022
2021
2022
(in thousands, except per
share data)
Revenue:
Product
$
202,946
$
168,751
$
705,804
$
757,623
Support, entitlements and other
services
187,774
216,789
688,560
823,173
Total revenue
390,720
385,540
1,394,364
1,580,796
Cost of revenue:
Product (1)(2)
15,793
12,546
55,287
55,602
Support, entitlements and other services
(1)
62,726
67,346
236,619
265,554
Total cost of revenue
78,519
79,892
291,906
321,156
Gross profit
312,201
305,648
1,102,458
1,259,640
Operating expenses:
Sales and marketing (1)(2)
270,789
252,508
1,052,508
978,704
Research and development (1)
140,658
144,013
556,950
571,962
General and administrative (1)
42,642
42,547
153,782
166,418
Total operating expenses
454,089
439,068
1,763,240
1,717,084
Loss from operations
(141,888
)
(133,420
)
(660,782
)
(457,444
)
Other expense, net
(211,610
)
(11,273
)
(354,991
)
(320,830
)
Loss before provision for income taxes
(353,498
)
(144,693
)
(1,015,773
)
(778,274
)
Provision for income taxes
4,684
6,297
18,487
19,264
Net loss
$
(358,182
)
$
(150,990
)
$
(1,034,260
)
$
(797,538
)
Net loss per share attributable to Class A
and Class B common stockholders—basic and diluted (3)
$
(1.68
)
$
(0.67
)
$
(5.01
)
$
(3.62
)
Weighted average shares used in computing
net loss per share attributable to Class A and Class B common
stockholders—basic and diluted (3)
212,612
225,398
206,475
220,529
____________________ (1) Includes the following stock-based
compensation expense:
Three Months Ended July
31,
Fiscal Year Ended July
31,
2021
2022
2021
2022
(in thousands)
Product cost of revenue
$
1,569
$
1,850
$
6,023
$
7,379
Support, entitlements and other services
cost of revenue
6,598
7,282
24,460
30,846
Sales and marketing
29,814
23,617
122,815
104,592
Research and development
36,109
34,050
150,856
143,759
General and administrative
15,517
13,349
54,391
56,670
Total stock-based compensation expense
$
89,607
$
80,148
$
358,545
$
343,246
(2) Includes the following
amortization of intangible assets:
Three Months Ended July
31,
Fiscal Year Ended July
31,
2021
2022
2021
2022
(in thousands)
Product cost of revenue
$
3,694
$
3,367
$
14,776
$
13,579
Sales and marketing
651
651
2,604
2,604
Total amortization of intangible
assets
$
4,345
$
4,018
$
17,380
$
16,183
(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,
2021
2022
(in thousands)
Cash flows from operating
activities:
Net loss
$
(1,034,260
)
$
(797,538
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization
94,373
87,952
Stock-based compensation
358,545
343,246
Change in fair value of derivative
liability
269,265
198,038
Loss on debt extinguishment
—
64,910
Amortization of debt discount and issuance
costs
63,859
40,233
Operating lease cost, net of accretion
34,757
36,905
Impairment and early exit of lease-related
assets
1,420
597
Non-cash interest expense
16,074
19,270
Other
6,380
9,282
Changes in operating assets and
liabilities:
Accounts receivable, net
64,483
60,998
Deferred commissions
(127,891
)
(24,170
)
Prepaid expenses and other assets
4,057
(36,166
)
Accounts payable
(5,762
)
(1,461
)
Accrued compensation and benefits
50,916
(19,674
)
Accrued expenses and other liabilities
14,824
4,049
Operating leases, net
(37,582
)
(46,773
)
Deferred revenue
126,732
127,845
Net cash (used in) provided by operating
activities
(99,810
)
67,543
Cash flows from investing
activities:
Maturities of investments
784,176
1,058,116
Purchases of investments
(1,392,737
)
(1,081,246
)
Sales of investments
70,055
17,999
Purchases of property and equipment
(58,647
)
(49,058
)
Net cash used in investing activities
(597,153
)
(54,189
)
Cash flows from financing
activities:
Proceeds from sales of shares through
employee equity incentive plans
65,766
67,826
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
723,617
88,687
Repurchases of common stock
(125,079
)
(58,570
)
Payment of finance lease obligations
(459
)
(1,089
)
Net cash provided by financing
activities
663,845
103,635
Net (decrease) increase in cash, cash
equivalents and restricted cash
$
(33,118
)
$
116,989
Cash, cash equivalents and restricted
cash—beginning of period
321,991
288,873
Cash, cash equivalents and restricted
cash—end of period
$
288,873
$
405,862
Restricted cash (1)
3,150
3,012
Cash and cash equivalents—end of
period
$
285,723
$
402,850
Supplemental disclosures of cash flow
information:
Cash paid for income taxes
$
16,639
$
20,353
Supplemental disclosures of non-cash
investing and financing information:
Purchases of property and equipment
included in accounts payable and accrued and other liabilities
$
12,832
$
17,139
Finance lease liabilities arising from
obtaining right-of-use assets
$
8,299
$
10,491
____________________
(1)
Included within other
assets—non-current in the condensed consolidated balance
sheets.
Reconciliation of Revenue to Billings
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2021
2022
2021
2022
(in thousands)
Total revenue
$
390,720
$
385,540
$
1,394,364
$
1,580,796
Change in deferred revenue
38,768
12,580
126,732
127,845
Total billings
$
429,488
$
398,120
$
1,521,096
$
1,708,641
Disaggregation of Revenue and
Billings
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2021
2022
2021
2022
(in thousands)
Disaggregation of revenue:
Subscription revenue
$
352,178
$
350,632
$
1,243,621
$
1,433,773
Non-portable software revenue
12,945
11,447
71,390
49,694
Hardware revenue
3,234
340
6,259
5,585
Professional services revenue
22,363
23,121
73,094
91,744
Total revenue
$
390,720
$
385,540
$
1,394,364
$
1,580,796
Disaggregation of billings:
Subscription billings
$
390,290
$
364,113
$
1,354,155
$
1,563,560
Non-portable software billings
12,945
11,447
71,390
49,694
Hardware billings
3,234
340
6,259
5,585
Professional services billings
23,019
22,220
89,292
89,802
Total billings
$
429,488
$
398,120
$
1,521,096
$
1,708,641
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, Annual Recurring Revenue and Run-rate Annual Contract
Value
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2021
2022
2021
2022
(in thousands)
Annual Contract Value Billings (ACV
Billings)
$
176,251
$
193,197
$
594,292
$
756,326
Annual Recurring Revenue (ARR)
$
878,733
$
1,202,438
$
878,733
$
1,202,438
Run-rate Annual Contract Value (Run-rate
ACV)
$
1,535,360
$
1,797,423
$
1,535,360
$
1,797,423
Reconciliation of Subscription
and Professional Services Revenue to Subscription and Professional
Services Billings
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2021
2022
2021
2022
(in thousands)
Subscription revenue
$
352,178
$
350,632
$
1,243,621
$
1,433,773
Change in subscription deferred
revenue
38,112
13,481
110,534
129,787
Subscription billings
$
390,290
$
364,113
$
1,354,155
$
1,563,560
Professional services revenue
$
22,363
$
23,121
$
73,094
$
91,744
Change in professional services deferred
revenue
656
(901
)
16,198
(1,942
)
Professional services billings
$
23,019
$
22,220
$
89,292
$
89,802
Reconciliation of GAAP to Non-GAAP Profit Measures
(Unaudited)
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
252,508
(23,617
)
(651
)
—
(10,281
)
—
—
217,959
Research and development
144,013
(34,050
)
—
—
(633
)
—
—
109,330
General and administrative
42,547
(13,349
)
—
(597
)
(43
)
—
—
28,558
Total operating expenses
439,068
(71,016
)
(651
)
(597
)
(10,957
)
—
—
355,847
Loss from operations
(133,420
)
80,148
4,018
597
11,175
—
—
(37,482
)
Net loss
$
(150,990
)
$
80,148
$
4,018
$
597
$
11,175
$
15,524
$
1,033
$
(38,495
)
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
978,704
(104,592
)
(2,604
)
—
(10,281
)
—
—
—
—
—
861,227
Research and development
571,962
(143,759
)
—
—
(633
)
—
—
—
—
—
427,570
General and administrative
166,418
(56,670
)
—
(597
)
(43
)
(432
)
—
—
—
—
108,676
Total operating expenses
1,717,084
(305,021
)
(2,604
)
(597
)
(10,957
)
(432
)
—
—
—
—
1,397,473
Loss from operations
(457,444
)
343,246
16,183
597
11,175
432
—
—
—
—
(85,811
)
Net loss
$
(797,538
)
$
343,246
$
16,183
$
597
$
11,175
$
432
$
198,038
$
60,731
$
64,910
$
786
$
(101,440
)
Weighted shares outstanding, basic and
diluted
220,529
220,529
Net loss per share, basic and diluted
$
(3.62
)
$
1.56
$
0.07
$
-
$
0.06
$
-
$
0.90
$
0.28
$
0.29
$
-
$
(0.46
)
____________________
(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
GAAP
Non-GAAP Adjustments
Non-GAAP
Three Months Ended July 31,
2021
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Three Months Ended July 31,
2021
(in thousands, except
percentages and per share data)
Gross profit
$
312,201
$
8,167
$
3,694
$
(274
)
$
—
$
—
$
—
$
—
$
323,788
Gross margin
79.9
%
2.1
%
1.0
%
(0.1
)%
—
—
—
—
82.9
%
Operating expenses:
Sales and marketing
270,789
(29,814
)
(651
)
—
—
—
—
—
240,324
Research and development
140,658
(36,109
)
—
1,128
—
—
—
—
105,677
General and administrative
42,642
(15,517
)
—
—
(622
)
—
—
—
26,503
Total operating expenses
454,089
(81,440
)
(651
)
1,128
(622
)
—
—
—
372,504
Loss from operations
(141,888
)
89,607
4,345
(1,402
)
622
—
—
—
(48,716
)
Net loss
$
(358,182
)
$
89,607
$
4,345
$
(1,402
)
$
622
$
187,912
$
22,424
$
(756
)
$
(55,430
)
Weighted shares outstanding, basic and
diluted
212,612
212,612
Net loss per share, basic and diluted
$
(1.68
)
$
0.42
$
0.02
$
(0.01
)
$
-
$
0.88
$
0.11
$
-
$
(0.26
)
____________________
(1)
Stock-based compensation
expense
(2)
Amortization of intangible
assets
(3)
Recovery of lease-related asset
impairment charges
(4)
Other
(5)
Change in fair value of
derivative liability
(6)
Amortization of debt discount and
issuance costs and non-cash interest expense
(7)
Income tax effect primarily
related to stock-based compensation expense
GAAP
Non-GAAP Adjustments
Non-GAAP
Fiscal Year Ended July 31,
2021
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Fiscal Year Ended July 31,
2021
(in thousands, except share
and per share data)
Gross profit
$
1,102,458
$
30,483
$
14,776
$
13
$
—
$
—
$
—
$
—
$
1,147,730
Gross margin
79.1
%
2.2
%
1.0
%
—
—
—
—
—
82.3
%
Operating expenses:
Sales and marketing
1,052,508
(122,815
)
(2,604
)
—
—
—
—
—
927,089
Research and development
556,950
(150,856
)
—
(1,407
)
—
—
—
—
404,687
General and administrative
153,782
(54,391
)
—
—
(2,407
)
—
—
—
96,984
Total operating expenses
1,763,240
(328,062
)
(2,604
)
(1,407
)
(2,407
)
—
—
—
1,428,760
Loss from operations
(660,782
)
358,545
17,380
1,420
2,407
—
—
—
(281,030
)
Net loss
$
(1,034,260
)
$
358,545
$
17,380
$
1,420
$
2,407
$
269,265
$
79,933
$
743
$
(304,567
)
Weighted shares outstanding, basic and
diluted
206,475
206,475
Net loss per share, basic and diluted
$
(5.01
)
$
1.74
$
0.08
$
0.01
$
0.01
$
1.30
$
0.39
$
-
$
(1.48
)
____________________
(1)
Stock-based compensation
expense
(2)
Amortization of intangible
assets
(3)
Impairment of lease-related
assets
(4)
Other
(5)
Change in fair value of
derivative liability
(6)
Amortization of debt discount and
issuance costs
(7)
Income tax effect primarily
related to stock-based compensation expense
Reconciliation of GAAP Net Cash (Used in) Provided by
Operating Activities to Non-GAAP Free Cash Flow
(Unaudited)
Three Months Ended July
31,
Fiscal Year Ended July
31,
2021
2022
2021
2022
(in thousands)
Net cash (used in) provided by operating
activities
$
(24,630
)
$
38,004
$
(99,810
)
$
67,543
Purchases of property and equipment
(17,536
)
(14,779
)
(58,647
)
(49,058
)
Free cash flow
$
(42,166
)
$
23,225
$
(158,457
)
$
18,485
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220831005217/en/
Investor Contact: Richard Valera ir@nutanix.com Media
Contact: Jennifer Massaro pr@nutanix.com
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