Company Announcements

Nutanix Reports Third Quarter Fiscal 2022 Financial Results

Reports 28% YoY ACV Billings Growth and 17% YoY Revenue Growth

Delivers Outperformance Across All Guided Metrics

SAN JOSE, Calif.--(BUSINESS WIRE)--May 25, 2022-- Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced financial results for its third quarter ended April 30, 2022.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220525005354/en/

(Graphic: Business Wire)

(Graphic: Business Wire)

“Our third quarter reflected continued solid execution, demonstrating strong year-over-year top and bottom line improvement,” said Rajiv Ramaswami, President and CEO of Nutanix. “Late in the third quarter, we saw an unexpected impact from challenges that limited our upside in the quarter and affected our outlook for the fourth quarter. Increased supply chain delays with our hardware partners account for the significant majority of the impact to our outlook, and higher-than-expected sales rep attrition in the third quarter was also a factor. We don’t believe these challenges reflect any change in demand for our hybrid multicloud platform, and we remain focused on mitigating the impact of these issues and continuing to execute on the opportunity in front of us.”

“I’m excited to be taking on the role of CFO at this important time in Nutanix’s journey,” said Rukmini Sivaraman, CFO of Nutanix. “We continue to see good execution on our building base of subscription renewals, which is helping us drive towards profitable growth.”

Third Quarter Fiscal 2022 Financial Summary

 

Q3 FY’22

Q3 FY’21

Y/Y Change

Annual Contract Value (ACV)1 Billings

$204.7 million

$159.9 million

28%

Annual Recurring Revenue (ARR)2

$1.1 billion

$762.0 million

46%

Average Contract Term3

3.2 years

3.3 years

(0.1) year

Revenue4

$403.7 million

$344.5 million

17%

GAAP Gross Margin

80.2%

78.4%

180 bps

Non-GAAP Gross Margin

83.3%

81.7%

160 bps

GAAP Operating Expenses

$416.2 million

$450.6 million

(8)%

Non-GAAP Operating Expenses

$341.7 million

$361.5 million

(5)%

Free Cash Flow

$(20.1) million

$(71.5) million

$51.4 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

Fourth Quarter Fiscal 2022 Outlook

ACV Billings

$175 - $185 million

Revenue

$340 - $360 million

Non-GAAP Gross Margin

Approximately 79 to 80%

Non-GAAP Operating Expenses

$360 - $365 million

Weighted Average Shares Outstanding

Approximately 225 million

Fiscal 2022 Outlook

ACV Billings

$735 - $745 million

Revenue

$1.535 - $1.555 billion

Non-GAAP Gross Margin

Approximately 82%

Non-GAAP Operating Expenses

$1.402 - $1.407 billion

Supplementary materials to this press release, including our third quarter 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 third quarter 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 1-844-200-6205 from within the United States or +1 929-526-1599 from outside the United States. The access code is 125205. 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 1-866-813-9403 or +44 204-525-0658, and entering the access code 392621.

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 Revenuewas 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, non-GAAP net loss, non-GAAP net loss per share, free cash flow, subscription revenue, subscription billings, 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 and key performance 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) of operating lease-related assets, 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, other non-recurring transactions and the related tax impact, and the revenue and billings associated with pass-through hardware sales. 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, non-GAAP operating expenses, non-GAAP net loss, and non-GAAP net loss per share 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. Subscription revenue and subscription billings are performance measures that we believe provide useful information to our management and investors as they allow us to better track the growth of the subscription-based portion of our business, which is a critical part of our business plan. 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, non-GAAP net loss, non-GAAP net loss per share, and free cash flow are not substitutes for total revenue, gross margin, operating expenses, net loss, net loss per share, or net cash provided by (used in) operating activities, respectively; subscription revenue is not a substitute for total revenue; and subscription billings is not a substitute for subscription revenue. 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 Subscription and Professional Services Revenue to Subscription and Professional Services 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 fourth quarter fiscal 2022 outlook, our fiscal 2022 outlook, and our belief regarding demand for our hybrid multicloud platform); 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 and January 31, 2022 filed with the SEC on December 2, 2021 and March 10, 2022, respectively. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 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 trademarks of Nutanix, Inc. in the United States and other countries. Other brand names 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.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

As of

 

 

July 31,
2021

 

April 30,
2022

 

 

(in thousands)

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

285,723

 

 

$

386,721

 

Short-term investments

 

 

928,006

 

 

 

913,901

 

Accounts receivable, net

 

 

180,781

 

 

 

180,386

 

Deferred commissions—current

 

 

110,935

 

 

 

109,043

 

Prepaid expenses and other current assets

 

 

56,816

 

 

 

86,328

 

Total current assets

 

 

1,562,261

 

 

 

1,676,379

 

Property and equipment, net

 

 

131,621

 

 

 

117,494

 

Operating lease right-of-use assets

 

 

105,903

 

 

 

83,427

 

Deferred commissions—non-current

 

 

232,485

 

 

 

244,754

 

Intangible assets, net

 

 

32,012

 

 

 

19,848

 

Goodwill

 

 

185,260

 

 

 

185,260

 

Other assets—non-current

 

 

27,954

 

 

 

28,731

 

Total assets

 

$

2,277,496

 

 

$

2,355,893

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

47,056

 

 

$

53,438

 

Accrued compensation and benefits

 

 

162,337

 

 

 

123,106

 

Accrued expenses and other current liabilities

 

 

39,404

 

 

 

48,039

 

Deferred revenue—current

 

 

636,421

 

 

 

721,853

 

Operating lease liabilities—current

 

 

42,670

 

 

 

44,171

 

Convertible senior notes, net—current

 

 

 

 

 

145,308

 

Total current liabilities

 

 

927,888

 

 

 

1,135,915

 

Deferred revenue—non-current

 

 

676,502

 

 

 

710,127

 

Operating lease liabilities—non-current

 

 

86,599

 

 

 

54,373

 

Convertible senior notes, net

 

 

1,055,694

 

 

 

1,146,050

 

Derivative liability

 

 

500,175

 

 

 

 

Other liabilities—non-current

 

 

42,679

 

 

 

31,294

 

Total liabilities

 

 

3,289,537

 

 

 

3,077,759

 

Stockholders’ deficit:

 

 

 

 

 

 

Common stock

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

2,615,317

 

 

 

3,501,311

 

Accumulated other comprehensive income

 

 

(8

)

 

 

(6,146

)

Accumulated deficit

 

 

(3,627,355

)

 

 

(4,217,036

)

Total stockholders’ deficit

 

 

(1,012,041

)

 

 

(721,866

)

Total liabilities and stockholders’ deficit

 

$

2,277,496

 

 

$

2,355,893

 

 

NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended
April 30,

 

Nine Months Ended
April 30,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands, except per share data)

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

172,308

 

 

$

199,616

 

 

$

502,858

 

 

$

588,872

 

Support, entitlements and other services

 

 

172,200

 

 

 

204,042

 

 

 

500,786

 

 

 

606,384

 

Total revenue

 

 

344,508

 

 

 

403,658

 

 

 

1,003,644

 

 

 

1,195,256

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product (1)(2)

 

 

12,896

 

 

 

13,739

 

 

 

39,494

 

 

 

43,056

 

Support, entitlements and other services (1)

 

 

61,578

 

 

 

66,110

 

 

 

173,893

 

 

 

198,208

 

Total cost of revenue

 

 

74,474

 

 

 

79,849

 

 

 

213,387

 

 

 

241,264

 

Gross profit

 

 

270,034

 

 

 

323,809

 

 

 

790,257

 

 

 

953,992

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing (1)(2)

 

 

263,358

 

 

 

234,530

 

 

 

781,719

 

 

 

726,196

 

Research and development (1)

 

 

144,917

 

 

 

142,075

 

 

 

416,292

 

 

 

427,949

 

General and administrative (1)

 

 

42,332

 

 

 

39,552

 

 

 

111,140

 

 

 

123,871

 

Total operating expenses

 

 

450,607

 

 

 

416,157

 

 

 

1,309,151

 

 

 

1,278,016

 

Loss from operations

 

 

(180,573

)

 

 

(92,348

)

 

 

(518,894

)

 

 

(324,024

)

Other income (expense), net

 

 

61,352

 

 

 

(15,676

)

 

 

(143,381

)

 

 

(309,557

)

Loss before provision for income taxes

 

 

(119,221

)

 

 

(108,024

)

 

 

(662,275

)

 

 

(633,581

)

Provision for income taxes

 

 

4,419

 

 

 

3,611

 

 

 

13,803

 

 

 

12,967

 

Net loss

 

$

(123,640

)

 

$

(111,635

)

 

$

(676,078

)

 

$

(646,548

)

Net loss per share attributable to Class A and Class B common stockholders—basic and diluted (3)

 

$

(0.60

)

 

$

(0.50

)

 

$

(3.31

)

 

$

(2.95

)

Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders—basic and diluted (3)

 

 

207,715

 

 

 

222,473

 

 

 

204,407

 

 

 

218,888

 

 
(1) Includes the following stock-based compensation expense:

 

 

Three Months Ended
April 30,

 

Nine Months Ended
April 30,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

Product cost of revenue

 

$

1,291

 

 

$

1,830

 

 

$

4,454

 

 

$

5,529

 

Support, entitlements and other services cost of revenue

 

 

6,337

 

 

 

7,307

 

 

 

17,862

 

 

 

23,564

 

Sales and marketing

 

 

30,743

 

 

 

25,463

 

 

 

93,001

 

 

 

80,975

 

Research and development

 

 

40,802

 

 

 

35,467

 

 

 

114,747

 

 

 

109,709

 

General and administrative

 

 

16,113

 

 

 

14,439

 

 

 

38,874

 

 

 

43,321

 

Total stock-based compensation expense

 

$

95,286

 

 

$

84,506

 

 

$

268,938

 

 

$

263,098

 

(2) Includes the following amortization of intangible assets:

 

 

Three Months Ended
April 30,

 

Nine Months Ended
April 30,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

Product cost of revenue

 

$

3,694

 

 

$

3,368

 

 

$

11,082

 

 

$

10,212

 

Sales and marketing

 

 

651

 

 

 

651

 

 

 

1,953

 

 

 

1,953

 

Total amortization of intangible assets

 

$

4,345

 

 

$

4,019

 

 

$

13,035

 

 

$

12,165

 

(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.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Nine Months Ended
April 30,

 

 

2021

 

2022

 

 

(in thousands)

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(676,078

)

 

$

(646,548

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

70,609

 

 

 

67,123

 

Stock-based compensation

 

 

268,938

 

 

 

263,098

 

Change in fair value of derivative liability

 

 

81,353

 

 

 

198,038

 

Loss on debt extinguishment

 

 

 

 

 

64,910

 

Amortization of debt discount and issuance costs

 

 

46,178

 

 

 

29,929

 

Operating lease cost, net of accretion

 

 

25,818

 

 

 

27,496

 

Impairment of lease-related assets

 

 

2,822

 

 

 

 

Non-cash interest expense

 

 

11,331

 

 

 

14,408

 

Other

 

 

7,025

 

 

 

7,181

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

102,029

 

 

 

4,193

 

Deferred commissions

 

 

(94,034

)

 

 

(10,377

)

Prepaid expenses and other assets

 

 

(4,375

)

 

 

(31,723

)

Accounts payable

 

 

542

 

 

 

4,159

 

Accrued compensation and benefits

 

 

17,523

 

 

 

(46,379

)

Accrued expenses and other liabilities

 

 

4,039

 

 

 

4,509

 

Operating leases, net

 

 

(26,864

)

 

 

(35,743

)

Deferred revenue

 

 

87,964

 

 

 

115,265

 

Net cash (used in) provided by operating activities

 

 

(75,180

)

 

 

29,539

 

Cash flows from investing activities:

 

 

 

 

 

 

Maturities of investments

 

 

486,640

 

 

 

778,914

 

Purchases of investments

 

 

(1,145,335

)

 

 

(794,180

)

Sales of investments

 

 

70,055

 

 

 

17,999

 

Purchases of property and equipment

 

 

(41,111

)

 

 

(34,279

)

Net cash used in investing activities

 

 

(629,751

)

 

 

(31,546

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from sales of shares through employee equity incentive plans

 

 

62,343

 

 

 

66,644

 

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

 

 

 

 

 

(626

)

Net cash provided by financing activities

 

 

660,881

 

 

 

102,916

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

$

(44,050

)

 

$

100,909

 

Cash, cash equivalents and restricted cash—beginning of period

 

 

321,991

 

 

 

288,873

 

Cash, cash equivalents and restricted cash—end of period

 

$

277,941

 

 

$

389,782

 

Restricted cash (1)

 

 

3,265

 

 

 

3,061

 

Cash and cash equivalents—end of period

 

$

274,676

 

 

$

386,721

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid for income taxes

 

$

13,220

 

 

$

17,101

 

Supplemental disclosures of non-cash investing and financing information:

 

 

 

 

 

 

Purchases of property and equipment included in accounts payable and accrued and other liabilities

 

$

12,583

 

 

$

20,026

 

Finance lease liabilities arising from obtaining right-of-use assets

 

$

5,769

 

 

$

11,159

 

 

(1)

 

Included within other assets—non-current in the condensed consolidated balance sheets.

 

Reconciliation of Revenue to Billings

(Unaudited)

 

 

 

Three Months Ended
April 30,

 

Nine Months Ended
April 30,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

Total revenue

 

$

344,508

 

 

$

403,658

 

 

$

1,003,644

 

 

$

1,195,256

 

Change in deferred revenue

 

 

26,639

 

 

 

44,297

 

 

 

87,964

 

 

 

115,265

 

Total billings

 

$

371,147

 

 

$

447,955

 

 

$

1,091,608

 

 

$

1,310,521

 

 

Disaggregation of Revenue and Billings

(Unaudited)

 

 

Three Months Ended
April 30,

Nine Months Ended
April 30,

 

2021

2022

2021

2022

 

(in thousands)

Disaggregation of revenue:

 

 

 

 

Subscription revenue

$

307,332

$

370,496

$

891,443

$

1,083,141

Non-portable software revenue

 

16,741

 

 

9,368

 

 

58,445

 

 

38,247

 

Hardware revenue

 

975

 

 

1,329

 

 

3,025

 

 

5,245

 

Professional services revenue

 

19,460

 

 

22,465

 

 

50,731

 

 

68,623

 

Total revenue

$

344,508

 

$

403,658

 

$

1,003,644

 

$

1,195,256

 

Disaggregation of billings:

 

 

 

 

Subscription billings

$

330,774

 

$

412,720

 

$

963,865

 

$

1,199,447

 

Non-portable software billings

 

16,741

 

 

9,368

 

 

58,445

 

 

38,247

 

Hardware billings

 

975

 

 

1,329

 

 

3,025

 

 

5,245

 

Professional services billings

 

22,657

 

 

24,538

 

 

66,273

 

 

67,582

 

Total billings

$

371,147

 

$

447,955

 

$

1,091,608

 

$

1,310,521

 

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
April 30,

 

Nine Months Ended
April 30,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

Annual Contract Value Billings (ACV Billings)

 

$

159,919

 

 

$

204,724

 

 

$

430,747

 

 

$

577,519

 

Annual Recurring Revenue (ARR)

 

$

762,024

 

 

$

1,114,420

 

 

$

762,024

 

 

$

1,114,420

 

Run-rate Annual Contract Value (Run-rate ACV)

 

$

1,447,274

 

 

$

1,728,620

 

 

$

1,447,274

 

 

$

1,728,620

 

 

Reconciliation of Subscription and Professional Services Revenue to Subscription and Professional Services Billings

(Unaudited)

 

 

 

Three Months Ended
April 30,

 

Nine Months Ended
April 30,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

Subscription revenue

 

$

307,332

 

 

$

370,496

 

 

$

891,443

 

 

$

1,083,141

 

Change in subscription deferred revenue

 

 

23,442

 

 

 

42,224

 

 

 

72,422

 

 

 

116,306

 

Subscription billings

 

$

330,774

 

 

$

412,720

 

 

$

963,865

 

 

$

1,199,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional services revenue

 

$

19,460

 

 

$

22,465

 

 

$

50,731

 

 

$

68,623

 

Change in professional services deferred revenue

 

 

3,197

 

 

 

2,073

 

 

 

15,542

 

 

 

(1,041

)

Professional services billings

 

$

22,657

 

 

$

24,538

 

 

$

66,273

 

 

$

67,582

 

 

Reconciliation of GAAP to Non-GAAP Profit Measures

(Unaudited)

 

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Three Months

Ended

April 30, 2022

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

Three Months

Ended

April 30, 2022

 

 

(in thousands, except percentages and per share data)

Gross profit

 

$

323,809

 

 

$

9,137

 

 

$

3,368

 

 

$

 

 

$

 

 

$

 

 

$

336,314

 

Gross margin

 

 

80.2

%

 

 

2.3

%

 

 

0.8

%

 

 

 

 

 

 

 

 

 

 

 

83.3

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

234,530

 

 

 

(25,463

)

 

 

(651

)

 

 

 

 

 

 

 

 

 

 

 

208,416

 

Research and development

 

 

142,075

 

 

 

(35,467

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

106,608

 

General and administrative

 

 

39,552

 

 

 

(14,439

)

 

 

 

 

 

1,578

 

 

 

 

 

 

 

 

 

26,691

 

Total operating expenses

 

 

416,157

 

 

 

(75,369

)

 

 

(651

)

 

 

1,578

 

 

 

 

 

 

 

 

 

341,715

 

Loss from operations

 

 

(92,348

)

 

 

84,506

 

 

 

4,019

 

 

 

(1,578

)

 

 

 

 

 

 

 

 

(5,401

)

Net loss

 

$

(111,635

)

 

$

84,506

 

 

$

4,019

 

 

$

(1,578

)

 

$

15,325

 

 

$

(940

)

 

$

(10,303

)

Weighted shares outstanding, basic and diluted

 

 

222,473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

222,473

 

Net loss per share, basic and diluted

 

$

(0.50

)

 

$

0.37

 

 

$

0.02

 

 

$

(0.01

)

 

$

0.07

 

 

$

-

 

 

$

(0.05

)

 

(1)

 

Stock-based compensation expense

(2)

 

Amortization of intangible assets

(3)

 

Other

(4)

 

Amortization of debt discount and issuance costs and interest expense related to convertible senior notes

(5)

 

Income tax effect primarily related to stock-based compensation expense and release of acquisition-related unrecognized tax positions

 

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Nine Months

Ended

April 30, 2022

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

(7)

 

Nine Months

Ended

April 30, 2022

 

 

(in thousands, except percentages and per share data)

Gross profit

 

$

953,992

 

 

$

29,093

 

 

$

10,212

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

993,297

 

Gross margin

 

 

79.8

%

 

 

2.4

%

 

 

0.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

83.1

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

726,196

 

 

 

(80,975

)

 

 

(1,953

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

643,268

 

Research and development

 

 

427,949

 

 

 

(109,709

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

318,240

 

General and administrative

 

 

123,871

 

 

 

(43,321

)

 

 

 

 

 

(432

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

80,118

 

Total operating expenses

 

 

1,278,016

 

 

 

(234,005

)

 

 

(1,953

)

 

 

(432

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,041,626

 

Loss from operations

 

 

(324,024

)

 

 

263,098

 

 

 

12,165

 

 

 

432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(48,329

)

Net loss

 

$

(646,548

)

 

$

263,098

 

 

$

12,165

 

 

$

432

 

 

$

198,038

 

 

$

45,207

 

 

$

64,911

 

 

$

(247

)

 

$

(62,944

)

Weighted shares outstanding, basic and diluted

 

 

218,888

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

218,888

 

Net loss per share, basic and diluted

 

$

(2.95

)

 

$

1.19

 

 

$

0.06

 

 

$

-

 

 

$

0.90

 

 

$

0.21

 

 

$

0.30

 

 

$

-

 

 

$

(0.29

)

 

(1)

 

Stock-based compensation expense

(2)

 

Amortization of intangible assets

(3)

 

Other

(4)

 

Change in fair value of derivative liability

(5)

 

Amortization of debt discount and issuance costs and interest expense related to convertible senior notes

(6)

 

Loss on debt extinguishment

(7)

 

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

April 30, 2021

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

Three Months

Ended

April 30, 2021

 

 

(in thousands, except percentages and per share data)

Gross profit

 

$

270,034

 

 

$

7,628

 

 

$

3,694

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

281,356

 

Gross margin

 

 

78.4

%

 

 

2.2

%

 

 

1.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

81.7

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

263,358

 

 

 

(30,743

)

 

 

(651

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

231,964

 

Research and development

 

 

144,917

 

 

 

(40,802

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

104,115

 

General and administrative

 

 

42,332

 

 

 

(16,113

)

 

 

 

 

 

(812

)

 

 

 

 

 

 

 

 

 

 

 

25,407

 

Total operating expenses

 

 

450,607

 

 

 

(87,658

)

 

 

(651

)

 

 

(812

)

 

 

 

 

 

 

 

 

 

 

 

361,486

 

Loss from operations

 

 

(180,573

)

 

 

95,286

 

 

 

4,345

 

 

 

812

 

 

 

 

 

 

 

 

 

 

 

 

(80,130

)

Net loss

 

$

(123,640

)

 

$

95,286

 

 

$

4,345

 

 

$

812

 

 

$

(85,027

)

 

$

22,098

 

 

$

497

 

 

$

(85,629

)

Weighted shares outstanding, basic and diluted

 

 

207,715

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

207,715

 

Net loss per share, basic and diluted

 

$

(0.60

)

 

$

0.46

 

 

$

0.02

 

 

$

0.01

 

 

$

(0.41

)

 

$

0.11

 

 

$

-

 

 

$

(0.41

)

 

(1)

 

Stock-based compensation expense

(2)

 

Amortization of intangible assets

(3)

 

Other

(4)

 

Change in fair value of derivative liability

(5)

 

Amortization of debt discount and issuance costs and non-cash interest expense

(6)

 

Income tax effect primarily related to stock-based compensation expense

 

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Nine Months

Ended

April 30, 2021

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

(7)

 

Nine Months

Ended

April 30, 2021

 

 

(in thousands, except share and per share data)

Gross profit

 

$

790,257

 

 

$

22,316

 

 

$

11,082

 

 

$

287

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

823,942

 

Gross margin

 

 

78.7

%

 

 

2.2

%

 

 

1.1

%

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

82.1

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

781,719

 

 

 

(93,001

)

 

 

(1,953

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

686,765

 

Research and development

 

 

416,292

 

 

 

(114,747

)

 

 

 

 

 

(2,535

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

299,010

 

General and administrative

 

 

111,140

 

 

 

(38,874

)

 

 

 

 

 

 

 

 

(1,785

)

 

 

 

 

 

 

 

 

 

 

 

70,481

 

Total operating expenses

 

 

1,309,151

 

 

 

(246,622

)

 

 

(1,953

)

 

 

(2,535

)

 

 

(1,785

)

 

 

 

 

 

 

 

 

 

 

 

1,056,256

 

Loss from operations

 

 

(518,894

)

 

 

268,938

 

 

 

13,035

 

 

 

2,822

 

 

 

1,785

 

 

 

 

 

 

 

 

 

 

 

 

(232,314

)

Net loss

 

$

(676,078

)

 

$

268,938

 

 

$

13,035

 

 

$

2,822

 

 

$

1,785

 

 

$

81,353

 

 

$

57,509

 

 

$

1,499

 

 

$

(249,137

)

Weighted shares outstanding, basic and diluted

 

 

204,407

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

204,407

 

Net loss per share, basic and diluted

 

$

(3.31

)

 

$

1.32

 

 

$

0.06

 

 

$

0.01

 

 

$

0.01

 

 

$

0.40

 

 

$

0.28

 

 

$

0.01

 

 

$

(1.22

)

 

(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
April 30,

 

Nine Months Ended
April 30,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

 

Net cash (used in) provided by operating activities

 

$

(55,551

)

 

$

(3,167

)

 

$

(75,180

)

 

$

29,539

 

Purchases of property and equipment

 

 

(15,943

)

 

 

(16,889

)

 

 

(41,111

)

 

 

(34,279

)

Free cash flow

 

$

(71,494

)

 

$

(20,056

)

 

$

(116,291

)

 

$

(4,740

)

 

Investor Contact:
Richard Valera
ir@nutanix.com

Media Contact:
Jennifer Massaro
pr@nutanix.com

Source: Nutanix, Inc.