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Nutanix : 2024 Q4 Earnings Call Transcript

Published on 08/29/2024 at 11:49 pm EDT - Modified on 08/29/2024 at 11:50 pm EDT

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Nutanix, Inc.

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Corrected Transcript

28-Aug-2024

Nutanix, Inc. (NTNX)

Q4 2024 Earnings Call

	Total Pages: 19
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Nutanix, Inc. (NTNX)	Corrected Transcript
Q4 2024 Earnings Call	28-Aug-2024

CORPORATE PARTICIPANTS

Richard Valera	Rukmini Sivaraman
Vice President-Investor Relations, Nutanix, Inc.	Chief Financial Officer, Nutanix, Inc.
Rajiv Ramaswami
President, Chief Executive Officer & Director, Nutanix, Inc.

.....................................................................................................................................................................................................................................................................

OTHER PARTICIPANTS

George Wang	Jason Ader
Analyst, Barclays Capital, Inc.	Analyst, William Blair & Co. LLC
James E. Fish	Victor Chiu
Analyst, Piper Sandler & Co.	Analyst, Raymond James & Associates, Inc.
Meta A. Marshall	Simran Biswal
Analyst, Morgan Stanley & Co. LLC	Analyst, RBC Capital Markets LLC
Ruplu Bhattacharya	Mike Cikos
Analyst, BofA Securities, Inc.	Analyst, Needham & Co. LLC

MANAGEMENT DISCUSSION SECTION

Operator: Thank you for standing by and welcome to Nutanix Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Rich Valera, Vice President of Investor Relations.

Richard Valera

Vice President-Investor Relations, Nutanix, Inc.

Good afternoon and welcome to today's conference call to discuss Nutanix's fourth quarter and fiscal year 2024 financial results. Joining me today are Rajiv Ramaswami, Nutanix's President and CEO; and Rukmini Sivaraman, Nutanix's CFO.

After the market closed today, Nutanix issued a press release announcing fourth quarter and fiscal year 2024 financial results. If you like to read the release, please visit the Press Releases section of our IR website.

During today's call, management will make forward-looking statements, including financial guidance. These forward-looking statements involve risks and uncertainties. Some of which are beyond our control, which could cause actual results to differ materially and adversely from those anticipated by these statements. For a more detailed description of these and other risks and uncertainties, please refer to our SEC filings, including our most recent annual report on Form 10-K and our subsequent quarterly reports on Form 10-Q, as well as our earnings press release issued today.

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Nutanix, Inc. (NTNX)	Corrected Transcript
Q4 2024 Earnings Call	28-Aug-2024

These forward-looking statements apply as of today, and we undertake no obligation to revise these statements after this call. As a result, you should not rely on them as predictions of future events. Please note, unless otherwise specifically referenced, all financial measures we use on today's call except for revenue are expressed on a non-GAAP basis and have been adjusted to exclude certain charges. We have provided, to the extent available, reconciliations of these non-GAAP financial measures to GAAP financial measures on our IR website and in our earnings press release.

Nutanix will be participating in the Goldman Sachs Communacopia and Technology Conference in San Francisco on September 9 and the Piper Sandler Growth Frontiers Conference in Nashville on September 10. We hope to see you at these events. Finally, our first quarter fiscal 2025 quiet period will begin on Friday, October 18.

And with that, I'll turn the call over to Rajeev. Rajiv?

Rajiv Ramaswami

President, Chief Executive Officer & Director, Nutanix, Inc.

Thank you, Rich, and good afternoon, everyone. Our fourth quarter was a solid finish to our 2024 fiscal year. We continued to see steady demand for our solutions driven by businesses prioritizing infrastructure modernization initiatives, while looking to adopt hybrid multi-cloud operating models and optimize their total cost of ownership. In the fourth quarter, we are happy to have exceeded all of our guided metrics. We delivered quarterly revenue of $548 million, up 11% year-over-year, and saw another quarter of strong free cash flow generation. We also saw the highest number of new logos we've seen in three years, an encouraging sign of building traction with some of our go-to-market partnerships and initiatives.

Our full year 2024 results demonstrated good progress on a number of fronts. Financially, we delivered solid top line performance driven by a continuous strong performance from our renewals business. We saw good growth in our pipeline of larger deals as we shifted our focus upmarket and saw increased engagement from prospects looking for alternative to their existing infrastructure solutions. Even as our land and expand business underperformed relative to our internal expectations due to the longer than expected sales cycles we see, we delivered revenue of $2.15 billion, up 15% year-over-year and ARR of $1.91 billion, up 22% year-over-year. Our bottom line performance was even stronger. We generated free cash flow of $598 million, almost 3 times higher than last year, resulting in a free cash flow margin of 28% and a Rule of 40 Score of 43.

In FY 2024, we also saw tangible progress on the partnership front with significant new or enhanced partnerships with Cisco, Dell and Nvidia. And I'm pleased that Dell XC Plus, our new turnkey HCI-based appliance offering with Dell is now generally available. We see these partnerships as both expanding our addressable market and providing us with meaningful go-to-market leverage.

Finally, we continue to innovate in FY 2024 with important new product releases and enhancements to our Nutanix Cloud Platform. These included the launch of GPT-in-a-Box, our solution for streamlining the adoption of generative AI by enterprises. We made meaningful progress towards our goal of becoming the best platform for modern applications, including the launch of Nutanix Data Services for Kubernetes or NDK, which offers consistent data services across both virtual machines and container assets, as well as the recent release of Nutanix Kubernetes Platform or NKP to simplify management of modern applications on premises and in any native public cloud service.

Our most significant wins in the quarter demonstrated the appeal of the Nutanix Cloud Platform to organizations that are looking to modernize their IP footprint and adopt hybrid cloud operating models as well as those looking

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Nutanix, Inc. (NTNX)	Corrected Transcript
Q4 2024 Earnings Call	28-Aug-2024

for alternatives in the wake of recent industry M&A. Our largest win in Q4 was a multimillion dollar ACV deal with a North American based Fortune 100 financial services company. Following a roughly year-and-a-half engagement with us, they chose to replace their existing solution with Nutanix Cloud Platform, including our AHV hypervisor, as well as Nutanix Cloud Manager. This customer, who had been using a competing HCI solution in much of the footprint, was able to utilize their existing hardware for their Nutanix software deployment, obviating the need for a hardware refresh.

We also had a number of significant wins that included our Nutanix Cloud Clusters, our NC2 capability, which enables workloads to be seamlessly and efficiently run in both private and public clouds. One of these was an existing customer and EMEA-based provider of global research services. This customer was looking to accelerate the migration of their workloads to the public cloud, while ensuring the workloads once migrated were run as efficiently and cost effectively as possible. Having already made a commitment to Microsoft Azure, they purchased licenses for Nutanix Cloud Platform to the Azure Marketplace with the intent of utilizing its NC2 capability to shift their on-prem workloads to Azure.

Another good example was a significant new customer win with a top North American University. Most of our customers start with our platform on-prem. However, this customer was motivated by their decision to migrate away from a competing platform they were using to run their virtual machine workloads at scale in the public cloud on AWS due to dissatisfaction with recent changes at their existing supplier. They chose Nutanix Cloud Platform to migrate their applications running in the public cloud to our NC2 on AWS, while also adopting our cloud platform to run their on-prem workloads. They also plan on adopting Nutanix Cloud Management for consistent self-service and automation across their private and public cloud estate.

A final notable example is a win with an Asia based global 2000 semiconductor provider. This full stack win, which was also a displacement of our primary competitor, enables the customer to streamline their operations, increase their level of automation, and reduce their dependence on more expensive proprietary storage solutions. It included adoption of Nutanix Database Service or NDB to enable them to move off of their expensive commercial databases to open source databases managed by NDB. This customer also plans to adopt our unified storage solution, replacing multiple third party storage options.

Finally, we also plan on utilizing NC2 on Azure to enable them to shift applications to the public cloud, including performing lift and shifts of IP workloads of acquired companies. We see the events as reflecting the value customers see in our platform as they look for seamless and efficient application portability, while adopting hybrid multi-cloud operating models, as well as the value of our partnership with Azure and AWS.

In closing, I am pleased with our solid Q4 and fiscal 2024 results and the progress we continue to make on multiple fronts, including our financial model, our partnerships and our ongoing innovation in our cloud platform towards our goal of becoming the leading platform for running applications and managing data anywhere. We also remain focused on capitalizing on what we view as a long-term opportunity to gain share in face of recent industry disruption and are encouraged by our early successes, including some of the wins I just highlighted.

Finally, I would like to express my sincere gratitude to our investors, customers, and partners for their trust in us and to our employees for their hard work that led to these results. And with that, I'll hand it over to Rukmini Sivaraman. Rukmini?

Rukmini Sivaraman

Chief Financial Officer, Nutanix, Inc.

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Nutanix, Inc. (NTNX)	Corrected Transcript
Q4 2024 Earnings Call	28-Aug-2024

Thank you, Rajiv, and thank you everyone for joining us. I will first discuss our Q4 fiscal 2024 and full fiscal year 2024 results, followed by our guidance for Q1 fiscal 2025 and for the full fiscal year 2025. Results in Q4 2024 came in above the high end of our range across all guided metrics. ACV billings in Q4 were $338 million above the guided range of $295 million to $305 million, representing year-over-year growth of 21%.

Revenue in Q4 was $548 million higher than the guided range of $530 million to $540 million, representing a year- over-year growth of 11%. ARR at the end of Q4 was $1.908 billion, representing year-over-year growth of 22%. In Q4, we continue to see modestly elongated average sales cycles compared to historical levels. Average contract duration in Q4 was 3.1 years, point one year higher than Q3. Non-GAAP gross margin in Q4 was 86.9% higher than our guided range of 85% to 86%. Non-GAAP operating margin in Q4 was 12.9% higher than our guided range of 9% to 10%, largely due to one, lower operating expenses as a result of higher than expected non- recurring payments related to one of our partnership agreements and a few other items. And two, slightly higher gross margin and revenue.

Non-GAAP net income in Q4 was $76 million or fully diluted EPS of $0.27 per share based on fully diluted weighted average shares outstanding of approximately 285 million shares. DSOs, based on revenue and ending accounts receivable were 39 days in Q4. Free cash flow in Q4 was $224 million, representing a free cash flow margin of 41%. Free cash flow in Q4 benefited from the collection on the eight figure ACV transaction that was booked in fiscal Q3.

Moving to the balance sheet, we ended Q4 with cash, cash equivalents and short-term investments of $994 million, down from $1.651 billion at the end of Q3. The primary reason for the reduction in our cash balance was Bain Capital's conversion of the 2026 notes, which we announced in June. We settled the conversion in Q4 by paying $817.6 million in cash and delivering approximately 16.9 million shares of common stock.

Please note that the entire conversion value had previously already been included in our fully diluted weighted average share count on an if converted basis. The actual settlement included a portion settled in cash rather than exclusively in shares, resulting in the issuance of approximately 17 million shares, which is 12 million lower than the 29 million that we had previously included on an if-converted basis.

Moving to capital allocation, we repurchased about $25 million worth of shares in Q4 and $131 million worth of shares in all of fiscal year 2024 under the share repurchase program previously authorized by our Board of Directors.

Looking at our full year financial results, we exceeded the high end of all guided metrics for fiscal year 2024. ACV billings in fiscal year 2024 were $1.162 billion higher than our guidance of $1.12 billion to $1.13 billion and representing a year over year growth of 21%. A reminder that the annual ACV billings is slightly lower than the sum of the ACV billings from the four quarters due to adjustments for deals with duration of less than a year. Revenue in fiscal year 2024 was $2.149 billion higher than our guidance of $2.13 billion to $2.14 billion and representing a year-over-year growth of 15%. We are pleased to have exceeded the $2 billion revenue threshold in fiscal year 2024.

We ended fiscal year 2024 with an ARR of $1.908 billion, as mentioned earlier, a year-over-year growth of 22%. Net dollar based retention rate or NRR at the end of fiscal year 2024 was 114%. As the fiscal year progressed, we saw a higher mix of larger deals in our pipeline. These larger opportunities often involve strategic decisions and C-suite approvals, causing them to take longer to close and to have greater variability in timing, outcome and deal structure.

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Nutanix, Inc. (NTNX)	Corrected Transcript
Q4 2024 Earnings Call	28-Aug-2024

And as we mentioned previously, we have continued to see a modest elongation of average sales cycles relative to historical levels. Largely due to these dynamics, our fiscal year 2024 land and expand ACV and ARR performance were below our initial expectations at the beginning of the fiscal year and we expect these dynamics to continue. Our renewals performance continued to be good through the fiscal year and a reminder that renewals tend to be at a lower aggregate average contract duration compared to land and expand. Average contract duration in fiscal year 2024 was 2.95 years, flattish to fiscal year 2023 and slightly higher than expected, partly due to some larger deals with greater than average duration.

Non-GAAP gross margin in fiscal year 2024 was 86.7%. Non-GAAP operating expenses in fiscal year 2024 were $1.515 billion, an increase of 7% year over year. As we began to make additional investments, primarily in research and development and sales and marketing. Non-GAAP operating margin in fiscal year 2024 was 16%, representing an improvement of over 700 basis points year over year. We also delivered our first full year of positive GAAP operating income of $8 million in fiscal year 2024. Non-GAAP net income was $384 million or diluted EPS of $1.31 per share, based on fully diluted weighted average shares outstanding of approximately 294 million shares.

Free cash flow in fiscal year 2024 was $598 million higher than our guidance of $520 million to $540 million and almost 3 times higher than last year's free cash flow. Free cash flow margin in fiscal year 2024 was 28%, implying free cash flow margin expansion of 17 percentage points year over year. Free cash flow in fiscal year 2024 benefited from approximately $30 million in non-recurring payments related to a partnership agreement as previously referenced.

Overall fiscal year 2024 was a significant year, marking our first year with positive GAAP operating income. Significant free cash flow generation of $598 million and free cash flow margin of 28%, while growing ARR at 22% and revenue at 15% year over year. We also delivered a Rule of 40 Score defined as the sum of revenue growth and free cash flow margin of 43 for fiscal year 2024, an improvement of 14 percentage points year-over-year and 28 percentage points higher, compared to two years ago.

Moving to fiscal year 2025. The guidance for the full year is as follows. Revenue of $2.435 billion to $2.465 billion, representing a year-over-year growth of 14% at the midpoint. Non-GAAP operating margin of approximately 15.5% to 17%. Free cash flow of $540 million to $600 million, representing a free cash flow margin of approximately 23% at the midpoint.

I will now provide some commentary regarding our fiscal year 2025 guidance. First, as previously mentioned at our 2023 Investor Day, we are streamlining our metrics by not reporting or guiding ACV billings starting in fiscal year 2025. ACV billings was intended as a transitional metric during our subscription evolution, and we believe that now is the time to evolve away from that metric. We are also no longer guiding to non-GAAP gross margin, which was previously useful as we navigated our business model changes leading to significant improvements in non-GAAP gross margin.

We will continue to guide to revenue, non-GAAP operating margin and free cash flow on an annual basis and to guide to revenue and non-GAAP operating margin for the subsequent quarters. Second, and moving on to assumptions in our guidance, we are seeing continued and significant land and expand opportunities and a growing pipeline for our solutions. However, we continue to see a higher mix of larger deals in our pipeline, which is driving greater variability in our land and expand bookings. These larger opportunities often involve strategic decisions and C-suite approvals at the customer or prospect, causing them to take longer to close and to have greater variability in timing, outcome and deal structure. And as we mentioned previously, we continue to see a modest elongation of average sales cycles relative to historical levels which we expect to continue. Third, the

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Nutanix, Inc. (NTNX)	Corrected Transcript
Q4 2024 Earnings Call	28-Aug-2024

guidance assumes that renewals will continue to perform well in fiscal year 2025. Fourth, the full year guidance assumes that average contract duration will be flat to slightly lower compared to fiscal year 2024, as renewals continue to grow as a percentage of our billings. Fifth, the non-GAAP operating margin guidance assumes incremental, prudent investments in sales and marketing and R&D targeted towards addressing our large market opportunity. It also factors in the annualized run rate of the incremental investments we made in fiscal year 2024. It also assumes a $20 million to $25 million headwind in operating expenses relative to fiscal year 2024 from payments related to one of our partnership agreements. Specifically, there was about $44 million of this benefit to the R&D operating expense line in fiscal year 2024, and we anticipate it to be $20 million to $25 million in fiscal year 2025. And sixth, the free cash flow guidance reflects an approximately $30 million headwind relative to fiscal year 2024 from lower interest income as a result of our lower invested cash due to the cash payments on the conversion of the 2026 convertible notes. We expect free cash flow in fiscal year 2025 to also benefit from the approximately $30 million in non-recurring payments related to a partnership agreement similar to the benefit we saw in fiscal year 2024. It is expected to tail off towards the end of fiscal year 2025.

Moving to Q1 2025, our guidance for Q1 is as follows. Revenue of $565 million to $575 million, non-GAAP operating margin of 14.5% to 15.5%. Fully diluted weighted average shares outstanding of approximately 287 million shares.

In closing, we are pleased that our Q4 and fiscal year 2024 performance exceeded guidance across all metrics. We are excited about the long-term market opportunity and Nutanix's ability to deliver compelling outcomes for customers and prospects. We remain committed to continued progress aligned with our stated philosophy of sustainable, profitable growth, both through durable top line growth and expanding margin.

With that operator, please open the line for questions.

QUESTION AND ANSWER SECTION

Operator: Certainly. And ladies and gentlemen, we ask that you please limit yourself to one question and one follow up. You may get back in the queue as time allows. Our first question comes from the line of George Wang from Barclays. Your question, please.

George Wang

Analyst, Barclays Capital, Inc.

Oh, yeah. Thanks for taking my question. Firstly, just curious if you have any update on the Broadcom kind of churn, especially in the last couple of quarters, you guys talked about that after the initial wave of strong engagement, that activity slowed just because of Broadcom walking back some of the initial initiatives. So we're now more in favor of retaining some of the prior customers. Just curious if that dynamic has changed.

Rajiv Ramaswami

President, Chief Executive Officer & Director, Nutanix, Inc.

Hi, George. Rajiv here. Yeah, we are - it's largely an unchanged multi-year opportunity to gain share, like we said last quarter. While the sales cycles have been a bit longer than we had initially anticipated. Thus far, we haven't really seen any meaningful changes in our win or loss rates on these opportunities. As we talked about in our prepared remarks, we are seeing some of these larger opportunities close. We gave you a few examples in the prepared remarks, and I do expect that we'll continue to see more of these over time.

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Nutanix, Inc. (NTNX)	Corrected Transcript
Q4 2024 Earnings Call	28-Aug-2024

Now, in the midsize and smaller customer segments, we are seeing significant increased engagement and opportunity as many of these smaller companies look for alternative and generally less competitive engagements related to the larger customer opportunities. Along with our increased leverage from our go-to-market partnerships that we've talked about, as well as our programs and incentives that we have in place. This dynamic has also been one of our drivers for our larger, stronger new logo performance.

George Wang

Analyst, Barclays Capital, Inc.

Okay. Okay, great. Just if I can squeeze in quickly. Just it's nice to see one customer finishes service and you guys mentioned without changing the underlying hardware, previously that the gating factor - one of the gating factors being the upgrading the underlying hardware to wait for the hardware refresh. I guess can you talk about sort of better path going forward and kind of now it seems, especially after the Alpine this year, maybe you're kind of removing some of the constraints related to the underlying hardware refresh.

Rajiv Ramaswami

President, Chief Executive Officer & Director, Nutanix, Inc.

Yeah.

George Wang

Analyst, Barclays Capital, Inc.

Maybe you can give a little bit more color on that.

Rajiv Ramaswami

President, Chief Executive Officer & Director, Nutanix, Inc.

No, that's a very good question, George. I think if you at the installed base out there in data center, as the vast majority of it, I don't have the exact number, but roughly around 80% of it is what we call three tiered infrastructure, separate storage, compute and networking. And, as you know, we have a HCI solution today in the market. And if we want to replace the three tier with HCI, it's a better architecture, and more cost effective long term, but it does require a hardware refresh. Now the remaining 20% is HCI of which we are a market leader and our competition has some of the rest. Now, in this particular case, the example that we talked about, the customer was already on HCI with a competing product and when you're already on HCI, we've been quite successful at having our software be able to run on existing hardware because it's already HCI hardware and that's what happened in this particular account. And so for that subset of customers that are already on HCI, the migration path is easier. And in some subset of those cases we don't need a hardware refresh. And that's what happened here.

On the three tier, it does require a hardware refresh. Now, we're also addressing the three tier market, to your point. You know, one aspect of our partnership with Dell is that we said we would -- they would be the first that we would support an external storage Dell Powerflex. And now the whole idea of doing that is now we can find an easier insertion into three-tier deployments without having to change out the hardware. Now, that solution is not available in the market today. It's only going to be available sometime next year. And over time we anticipate being able to offer that support to a broader set of third party storage arrays.

George Wang

Analyst, Barclays Capital, Inc.

Okay. Thank you. I'll go back to the queue.

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Nutanix, Inc. (NTNX)	Corrected Transcript
Q4 2024 Earnings Call	28-Aug-2024

Operator: Thank you. And our next question comes from the line of Jim Fish from Piper Sandler. Your question, please.

James E. Fish

Analyst, Piper Sandler & Co.

Hey, guys. Thanks for the questions here. Rajiv, do want to ask around potentially you alluded to a little bit of GPT-in-a-Box here. I don't think we'd be on a conference call anymore without talking about AI, but are you seeing any sort of trend of repatriation of workloads back to private cloud for just a core workload as well as for AI I guess, any update on the GPT-in-a-Box?

Rajiv Ramaswami

President, Chief Executive Officer & Director, Nutanix, Inc.

Yeah. So, Jim, good question. I'll give you a two part answer to that. First, in general public workloads and then second on GPT. For general purpose workloads, to your point, for steady state workloads, I think people are getting to the conclusion that it's much more cost effective to run those on-prem in a private cloud environment. We have seen some repatriation. We've also seen much more deliberation in terms of whether that workload goes to the public cloud in the first place, because a lot of the deployment is still on-prem of enterprise workloads. So we're certainly think the trend and realization customers to say, steady state workloads, we can run them more cost effectively in private clouds. And on GPT specifically, I think a lot of the initial interest in GEnAI, have been in these creation and training of LLM, large language models and a lot of that is being done in the public cloud and massive GPU fronts and we don't have a - we don't play that fully back.

But on the other hand, we think the bulk of the enterprise opportunity in terms of how companies are actually going to use it is potentially going to be on-prem because at the end of the day, the genAI workloads applications have to be run wherever the customer data is. And in a lot of cases, sensitive customer data is either inside data centers or at the edges. And so a platform like ours, GPT-in-a-Box provides a very simple, easy to use, secure way of running GenAI applications. And so the use cases that we've seen so far have been around for co-piloting, around document sets and analysis and our customer support and on enhanced fraud detection. We are seeing certainly continued traction. It's still early days for us, but across multiple verticals Healthcare, Financial Services, Government. So early days for GPT adoption in the private cloud enterprise. But I think that's going to be a growing market for fine-tuning RAG, retrieval augmented generation and for inferencing in terms of running these AI workloads close to the data in a private and secure way.

James E. Fish

Analyst, Piper Sandler & Co.

Makes sense. And, Rukmini, I'm sure you're anticipating this question already, but I guess how much as we think about that 2025 guide, how much incremental contribution are you expecting either from a growth dollar perspective, however you want to put it between, the VMware opportunity, the Cisco and Dell partnerships versus the expansion within your existing install base. That, if memory serves me right, should be accelerating a little bit in terms of the renewals up for grabs this year. And is there a way to think about where ARR actually exits this year? Thanks, guys.

Rukmini Sivaraman

Chief Financial Officer, Nutanix, Inc.

Thank you, Jim, for that question. So in terms of contribution from the various buckets that you called out, Jim, so I'll give you some qualitative color on that. Right. So we've talked about in general, we have, happy with our

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Nutanix, Inc. (NTNX)	Corrected Transcript
Q4 2024 Earnings Call	28-Aug-2024

pipeline generation overall. We have talked about the growing pipeline and the fact that the pipeline from larger deals is growing faster and that can lead to variability. Right. With respect to timing or outcome or more complex deal structures and so on. And so some of those dynamics we expect to continue next year, similarly with just modestly elongated sales cycles across the board, not just large deals, right, but across the board. And we expect that to continue next year as well.

In terms of the contribution from Cisco, we do expect the Cisco contribution to grow in fiscal year 2025 relative to last year. And we do expect a small initial contribution from Dell XC Plus, which is the new offering that's generally available now. And we expect small initial contribution from that in 2025 and expect that to grow as well over time. And so all of that is taken into account when you think about the fiscal year 2025 top line guide that we provided. Jim, the other thing you alluded to is renewals. So, yes, our renewals business continues to grow nicely year over year. So that's factored in there as well. And I think the last part of your question was around ARR. So we will of course, continue to report ARR on a quarterly basis. And while we noted that ARR underperformed for fiscal 2024 relative to our internal expectations, we're not providing guidance for ARR.

Rajiv Ramaswami

President, Chief Executive Officer & Director, Nutanix, Inc.

Yeah. The only thing I'll add to that Rukmini would be I think Jim you also had a question on the Broadcom opportunity. And like I said that's largely unchanged, but it's also very difficult to explicitly parse that out because every one of our deals historically we've been - we had been competing against VMware in the past and that continues. So, there's some level of influence. Is it only - these are the only reason why people come to us. It's a little hard for us to tease that out separately.

Rukmini Sivaraman

Chief Financial Officer, Nutanix, Inc.

Yes. Thank you, Rajiv. That attribution is certainly nuanced. So we do expect it to continue to contribute some, but we wouldn't be overly precise on that. So thank you, Rajiv, and thank you, Jim, for the question.

James E. Fish

Analyst, Piper Sandler & Co.

Thanks, guys.

Operator: Thank you. And our next question comes from the line of Meta Marshall from Morgan Stanley. Your question, please.

Meta A. Marshall

Analyst, Morgan Stanley & Co. LLC

Great. Thanks. Wanted to get a sense of maybe kind of circling back to the question that's been asked a couple of times. Just in terms of, do you feel like you've kind of figured out where, Broadcom's line is where kind of the definition of your customer is? Or are you kind of refining where you think the most actionable opportunities are? Or are you still kind of in that discovery mode of figuring out what are the most actionable opportunities? And then, Rukmini, I know Jim just asked about it, but just kind of any of the timing of renewals or co-terming, just given that we've had some kind of early renewal dynamics and kind of co-terming issues over the past couple of years that we should just be mindful of as we go into fiscal 2025. Thanks.

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Nov. 26	Top Premarket Decliners	MT
Nov. 26	Stocks Rise Pre-Bell as Investors Assess Latest Economic Data; Fed Rate-Cut Optimism Continues	MT
Nov. 26	Nutanix Fiscal Q1 Adjusted EPS In-Line But Revenue Misses; Cuts Full-Year Sales Outlook; Shares Sink Premarket	MT
Nov. 26	Analyst recommendations: Intuit, Abercombie & Fitch, Nutanix, Pinterest…
Nov. 26	Nutanix, Inc., Q1 2026 Earnings Call, Nov 25, 2025
Nov. 25	Nutanix Fiscal Q1 Adjusted Earnings, Revenue Rise; FY Revenue Guidance Cut; Shares Fall After Hours	MT
Nov. 25	(NTNX) Nutanix Expects Fiscal Year 2026 Revenue Range $2.82B - $2.86B, vs. FactSet Est of $2.92B	MT
Nov. 25	(NTNX) Nutanix, Inc. Expects Q2 Revenue Range $705.0M - $715.0M	MT
Nov. 25	Earnings Flash (NTNX) Nutanix, Inc. Reports Q1 Revenue $670.6M, vs. FactSet Est of $676.6M	MT
Nov. 25	Earnings Flash (NTNX) Nutanix, Inc. Posts Q1 Adjusted EPS $0.41 per Share, vs. FactSet Est of $0.41	MT
Nov. 25	Nutanix, Inc. Provides Earnings Guidance for the Second Quarter and Year End of Fiscal 2026	CI
Nov. 25	Nutanix, Inc. Reports Earnings Results for the First Quarter Ended October 31, 2025	CI
Nov. 18	Nutanix, Microsoft Expand Azure Virtual Desktop to Hybrid Environments	MT
Nov. 18	Nutanix, Inc. Expands Microsoft Azure Virtual Desktop Flexibility Across Hybrid Cloud	CI
Oct. 29	DartPoints Joins Nutanix Elevate Partner Program to Deliver Advanced Private Cloud Solutions for Enterprise Workloads	CI
Oct. 28	Leostream Receives Nutanix Ready AHV Designation for Large-Scale VDI Deployments	CI
Oct. 09	Sector Update: Tech Stocks Fall Late Afternoon	MT

Chart Nutanix, Inc.

Duration

Period

NTNX: Dynamic Chart

Company Profile

Nutanix, Inc. is engaged in cloud software, offering organizations a single platform for running apps and data across clouds. The Companyâs Nutanix Cloud Platform is designed to enable organizations to build a hybrid multicloud infrastructure, providing a consistent cloud operating model with a single platform for running applications and managing data in core data centers, at the edge, and on public clouds, all while supporting a variety of hypervisors and container platforms. Nutanix Cloud Platform supports a variety of workloads with varied compute, storage, and network requirements, including business-critical applications, data platforms, general-purpose workloads, end user computing and virtual desktop infrastructure services, enterprise artificial intelligence (AI) workloads, and cloud native applications. Its solutions are primarily sold through its channel partners or original equipment manufacturers (OEMs) and delivered directly to its end customers.

Employees

7,800

Sector

IT Services & Consulting

Calendar

Dec. 11 - Barclays Global Technology Conference

More about the company