Nutanix AI platform is 'fundamental to every customer': CEO

Nutanix (NTNX) shares are seeing a boost this morning after topping fiscal first-quarter earnings estimates.

Nutanix CEO Rajiv Ramaswami joins Yahoo Finance Live to weigh in on the factors that have driven the cloud computing company's growth. Ramaswami states plainly that “every company is a tech company” and thus data management and applications to better manage AI functions are increasingly essential.

Ramaswami teases the rolling out of a new platform, GPT-in-a-Box, which would allow companies to capitalize on AI. In terms of revenue, Ramaswami predicts this platform is “fundamental to every customer” due to the hastening adoption of AI.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

BRAD SMITH: Shares of Nutanix gaining ground this morning. The cloud service provider beat Wall Street expectations in its fiscal first quarter here against the challenged economic backdrop. The company enjoyed boosts across free cash flow and billings but in the fiscal year ahead, they noted it's been a stellar 2023 for the company thus far.

Shares up almost 60% year to date here, a little bit over that as at this point in time. Rajiv Ramaswami who is the Nutanix CEO joins us now. Great to see you, Rajiv. We just were speaking with you in Times Square a few weeks back here off of the investor day, so notably here, going into 2024, and what you've been able to set up and communicate to the investors here on the day and on the back of this report, what are some of the biggest catalysts that you're going to be looking for going into the start of next year?

RAJIV RAMASWAMI: Yeah, I mean, we just, by the way, started our fiscal year. This is our first quarter of the year. And we were pleased about-- we exceeded all our guided metrics, we also were pleased to raise guidance for the full year. And what's driving all of this is at the underlying heart is our customers, every company is a tech company.

Data and applications are critical and where to place them, how to run them are critical to every company, including you at Yahoo, and so this is what we do. We help companies run their applications and manage all their data wherever they'd like to run it inside their data centers, in public clouds or at the edges and that's really at the core driving our growth because it's critical for most companies to go digital.

SEANA SMITH: Rajiv, when it comes to AI and what you are doing there, that's also a big driver here as we look ahead to 2024 and something that you mentioned on the earnings call caught my attention. We've been talking a lot about your products right now and actually also caught the attention of an analyst as well but the GPT-in-a-Box. You have your first big customer it sounds like there.

What can you tell us just about that partnership and I guess, what that adoption rate looks like here in 2024?

RAJIV RAMASWAMI: Yes, it's still very early days for us with GPT-in-a-Box. We just actually launched the platform a couple of months ago and what it is, is simply a turnkey platform for companies to run their AI applications on our stack in a very easy way. Now I think AI needs to run where the data is and data is everywhere like we've said and we provide a secure way for companies to easily run those applications.

Now we were happy to have gotten our first win this last quarter here, and this was with a large federal agency. The use cases that we are seeing, in terms of what customers are trying to do with this, first are automate customer service, second, a lot of applications, when it comes to document search, document analysis, document retrieval, the third, fraud and investigating fraud and more creative ways to figure out fraud and the fourth is co-piloting.

These are the use cases that we are seeing, and, again, we are thrilled that one of our large customers in the federal space actually has gone out and started using this for one of these use cases.

BRAD SMITH: And what type of revenue then do you see generated off of something like a GPT-in-a-Box and how replicable is that experience across all of your customers?

RAJIV RAMASWAMI: Well, I think it's going to be fundamental to every customer because over the last six months, I've had conversations with customers. Every customer is thinking about how to use AI to improve their products or become more productive and so a lot of new applications are going to be built are going to be around AI, and they need a platform to run these.

I do think it's going to be a bit long term, though because most companies are only now trying to figure out how to do these things. What is the ROI on automation that they can get with AI? And so I think it's going to take some time for this to build up into production from a lot of interest today to actual revenue delivered at scale over the next few years.

SEANA SMITH: Rajiv Ramaswami, always great to have you here at Yahoo Finance. Congratulations on the most recent quarter. We look forward to talking with you again soon.

RAJIV RAMASWAMI: Thank you, Seana and Brad.