U.S. Markets closed

Pivotal Software (PVTL) Q3 Earnings & Revenues Increase Y/Y

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.

Quarter Details

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.

Guidance

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.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Twitter, Inc. (TWTR) : Free Stock Analysis Report
 
Castlight Health, inc. (CSLT) : Free Stock Analysis Report
 
Alteryx, Inc. (AYX) : Free Stock Analysis Report
 
Pivotal Software, Inc. (PVTL) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research