Pivotal Software, Inc. PVTL reported third-quarter fiscal 2019 non-GAAP loss of 5 cents per share, much narrower than the year-ago quarter’s loss of 13 cents.
Revenues of $168.1 million increased 30.4% on a year-over-year basis, primarily driven by higher subscription revenues. The figure was better than the Zacks Consensus Estimate of $164 million.
The consensus mark for loss per share was pegged at 17 cents.
Subscription revenues (59.9% of total revenues) were $100.8 million, up 52.6% year over year. Services revenues (40.1% of total revenues) increased 7.1% year over year to $67.4 million.
Subscription customers grew 17% year over year to 368. The company added 14 net new customers in the quarter. Dollar-based net expansion rate was 150%.
Pivotal Software benefited from strong sales of its cloud-native platform and strategic services. During the quarter, the company released updates to Pivotal Application Service (PAS) and Pivotal Container Service (PKS).
Pivotal Software, Inc. Price, Consensus and EPS Surprise
Pivotal Software, Inc. Price, Consensus and EPS Surprise | Pivotal Software, Inc. Quote
Notably, the latest release, PKS 1.2 will provide support to Amazon Web Services (AWS). This makes it easier for teams to get Kubernetes running on the cloud of their choice quickly and securely.
In third-quarter fiscal 2019, non-GAAP gross profit surged 45.6% year over year to $112.1 million. Gross margin expanded 700 basis points (bps) to 66.7%, driven by favorable revenue mix.
Sales & marketing (S&M) expenses increased 26.5% year over year to $63.9 million. General & administrative (G&A) expenses increased 22.6% to $16.7 million. Research & development (R&D) expenses increased 22.4% to $46.4 million.
Operating expenses increased 24.4% year over year to $127 million.
Non-GAAP operating loss of $14.8 million was narrower than the year-ago quarter’s $25 million.
For fourth-quarter fiscal 2019, subscription revenues are anticipated between $109.5 million and $110.5 million. Total revenues are anticipated between $169 million and $171 million.
Non-GAAP loss from operations is expected between $26 million and $25 million. Non-GAAP net loss is expected between 10 cents and 9 cents per share.
For fiscal 2019, subscription revenues are anticipated between $398 million and $399 million. Total revenues are anticipated between $657 million and $659 million.
Non-GAAP loss from operations is expected between $76.5 million and $75.5 million. Non-GAAP net loss is expected between 32 cents and 31 cents per share.
Zacks Rank & Stocks to Consider
Currently, Pivotal Software carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the same sector are Twitter TWTR, Castlight Health CSLT and Alteryx AYX. All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Expected long-term earnings growth for Twitter, Castlight and Alteryx is 22.1%, 22.5% and 8%, respectively.
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