Nutanix Inc (NTNX) Reports Solid Q2 Fiscal 2024 Results with 26% ARR Growth and Strong Free ...
Annual Recurring Revenue (ARR): Grew by 26% year-over-year to $1.74 billion.
Revenue: Increased by 16% year-over-year to $565.2 million.
GAAP Operating Income: Reported a GAAP operating income of $37.0 million, a significant improvement from a loss of $56.5 million in Q2 FY23.
Free Cash Flow: Generated a strong free cash flow of $162.6 million, up from $63.0 million in Q2 FY23.
GAAP and Non-GAAP Gross Margin: GAAP gross margin improved to 85.6%, and non-GAAP gross margin to 87.3%.
Outlook: Q3 FY24 revenue is expected to be between $510 - $520 million with non-GAAP operating margin between 7.5% to 8.5%.
On February 28, 2024, Nutanix Inc (NASDAQ:NTNX), a leader in hybrid multicloud computing, released its 8-K filing, announcing financial results for its second quarter ended January 31, 2024. The company, known for providing native hybrid cloud capabilities to businesses, delivered a robust performance with significant year-over-year growth in key financial metrics, despite the challenges posed by an uncertain global economic environment.
Nutanix Inc (NASDAQ:NTNX) reported a 26% year-over-year growth in Annual Recurring Revenue (ARR), reaching $1.74 billion, and a 23% increase in Annual Contract Value (ACV) Billings to $329.5 million. The company's revenue rose to $565.2 million, a 16% increase compared to the same quarter last year. Notably, Nutanix achieved GAAP operating profitability for the first time, with a GAAP operating income of $37.0 million, marking a significant turnaround from the $56.5 million loss reported in Q2 FY23.
President and CEO Rajiv Ramaswami expressed confidence in the company's disciplined execution and commitment to being a strategic partner to customers in the hybrid multicloud world. CFO Rukmini Sivaraman highlighted the balance of top and bottom line performance, emphasizing the strong free cash flow generation and the achievement of GAAP operating profitability as evidence of the company's progress in driving operating leverage and optimizing results.
The company's improved financial health is further reflected in the gross margin expansion, with GAAP gross margin increasing by 340 basis points to 85.6%, and non-GAAP gross margin improving by 250 basis points to 87.3%. Operating expenses on a GAAP basis decreased by 2% year-over-year, while non-GAAP operating expenses increased by 8%, reflecting continued investment in the business.
Looking ahead, Nutanix provided guidance for the third quarter of fiscal 2024, with expected ACV Billings between $265 - $275 million and revenue projected to be in the range of $510 - $520 million. The company anticipates a non-GAAP gross margin of approximately 85% and a non-GAAP operating margin between 7.5% to 8.5%. For the full fiscal year 2024, Nutanix forecasts ACV Billings between $1.09 - $1.11 billion, revenue between $2.12 - $2.15 billion, and free cash flow of $420 - $440 million.
The company's solid performance and positive outlook are indicative of its successful transition to a subscription-based business model and its ability to adapt to the evolving demands of the hybrid multicloud market. Nutanix's focus on innovation and customer-centric solutions continues to drive growth and profitability, positioning the company well for the future.
Investors and analysts interested in further details can access the company's second quarter fiscal 2024 earnings presentation and join the webcast and conference call hosted by Nutanix executives.
For value investors and potential GuruFocus.com members, Nutanix Inc (NASDAQ:NTNX)'s latest earnings report provides a clear indication of the company's financial trajectory and strategic positioning in the competitive software industry. The company's ability to generate strong free cash flow and achieve GAAP operating profitability for the first time is a testament to its operational efficiency and prudent financial management. With a focus on hybrid multicloud computing, Nutanix is well-equipped to meet the needs of businesses seeking to streamline operations and leverage cloud capabilities, making it a compelling consideration for investors looking for growth opportunities in the tech sector.
Explore the complete 8-K earnings release (here) from Nutanix Inc for further details.
This article first appeared on GuruFocus.
