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Nutanix Reports Second Quarter Fiscal 2021 Financial Results

Nutanix, Inc. (NASDAQ: NTNX), a leader in private cloud, hybrid and multicloud computing, today announced financial results for its second quarter ended January 31, 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210224005922/en/

(Graphic: Business Wire)

(Graphic: Business Wire)

“We delivered a strong quarter across the board, exceeding guidance on all metrics and continuing our momentum with key customer wins and solid execution,” said Rajiv Ramaswami, President and CEO of Nutanix. “In my first two months as CEO of Nutanix, my conviction that we have a talented employee base, loyal customers who love the simplicity of our software, and a strong market opportunity ahead of us has only been reinforced.”

“We delivered record ACV billings with growth of 14 percent year-over-year, bolstered by the strength of our emerging products,” said Duston Williams, CFO of Nutanix. “We continued to make progress on our transition to subscription and maintained our disciplined approach to managing operating expenses, which were lower than expected this quarter. We look forward to continuing to execute on our transformation and are confident Nutanix is well positioned for long-term value creation.”

Second Quarter Fiscal 2021 Financial Summary

Q2 FY’21

Q2 FY’20

Y/Y Change

Annual Contract Value (ACV)1 Billings

$159.2 million

$139.5 million

14%

Run-rate Annual Contract Value (ACV)2

$1.38 billion

$1.08 billion

28%

Total Average Contract Term3

3.4 years

3.9 years

(0.5) years

Total Revenue4

$346.4 million

$346.8 million

Flat

GAAP Gross Margin

79.5%

78.3%

120 bps

Non-GAAP Gross Margin

82.7%

81.4%

130 bps

GAAP Operating Expenses

$431.7 million

$478.6 million

(10)%

Non-GAAP Operating Expenses

$353.5 million

$396.3 million

(11)%

Free Cash Flow

$(28.5) million

$(73.7) million

$45.2 million

Reconciliations between GAAP and non-GAAP financial measures and key performance measures are provided in the tables of this press release.

Recent Company Highlights

  • Appointed Rajiv Ramaswami as President and Chief Executive Officer: Nutanix announced that it appointed Ramaswami to lead the company in its second decade with a focus on driving sustained growth, improving efficiency, and advancing leadership in the hybrid and multicloud categories. Ramaswami has a 30+ year track record of building and scaling businesses in cloud services, software, and network infrastructure for industry leaders including VMware, Broadcom, Cisco, and IBM.
  • Promoted Chris Kaddaras to Chief Revenue Officer: Nutanix promoted Kaddaras to Chief Revenue Officer to recognize his significant contributions spearheading the company’s Sales team transition to ACV and operationalizing the subscription transformation. Since joining Nutanix in 2016, Kaddaras has built and nurtured a talented and resilient Sales organization, while continuing to drive ACV billings growth in the middle of a significant business model shift.
  • Delivered Object and File Storage Solutions to Edge, Private and Public Clouds: Nutanix released new hybrid cloud capabilities for its unstructured data storage offerings, Objects and Files, enabling customers to simplify data management and effectively manage costs, moving IT teams even closer to true hybrid and multicloud operating models. The new capabilities include cloud tiering for object storage, hybrid cloud file storage, and simplified disaster recovery for both objects and files.
  • Introduced Strengthened Ransomware Protection Features: Nutanix added new features to its cloud platform to help protect against ransomware attacks at a time when they’re becoming even more common due to the rise in remote work. These new capabilities build on Nutanix’s rich data services for network security, files and objects storage, and business continuity to help enterprises prevent, detect and recover against ransomware attacks across multiple cloud environments.
  • Expanded New Customer Base and New Business with Existing Customers: Nutanix continued to add new customers, ending the second quarter of fiscal 2021 with a total of approximately 18,770 end-customers, including about 950 of the Global 2000 after adding about 20 in the quarter. Second quarter customers who continued to invest in Nutanix as part of their transformation journeys included the following Global 2000 companies: Hitachi Systems Power Services, Ltd., Mercedes-Benz do Brasil Ltda., Roche, Saint-Gobain, Total Gas & Power.

Third Quarter Fiscal 2021 Outlook

ACV Billings

$150 - $155 million

Non-GAAP Gross Margin

Approximately 81%

Non-GAAP Operating Expenses

$365 - $370 million

Weighted Average Shares Outstanding

Approximately 207 million

Supplementary materials to this press release, including our second quarter fiscal year 2021 earnings presentation, can be found at https://ir.nutanix.com/company/financial.

Webcast and Conference Call Information

Nutanix executives will discuss the company’s second quarter fiscal 2021 financial results on a conference call at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. To listen to the call via telephone, dial 1-833-227-5841 from within the United States or 1-647-689-4068 from outside the United States. The conference ID is 4194788. This call will be webcast live and available to all interested parties on our Investor Relations website at ir.nutanix.com. Shortly after the conclusion of the conference call, a replay of the audio webcast will be available on our Investor Relations website. A telephonic replay will be available for one week and can be accessed by calling 1-800-585-8367 or 1-416-621-4642, and entering the conference ID 4194788.

Definitions and Total Revenue Impact

1Annual Contract Value, or ACV, is defined as the total annualized value of a contract, excluding amounts related to professional services and hardware. The total annualized value for a contract is calculated by dividing the total value of the contract by the number of years in the term of such contract, using, where applicable, an assumed term of five years for contracts that do not have a specified term. ACV Billings for any given period is defined as the sum of the ACV for all contracts billed during the given period.

2Run-rate ACV at the end of any period is the sum of ACV for all contracts that are in effect as of the end of that period. For the purposes of this calculation, Nutanix assumes that the contract term begins on the date a contract is booked, irrespective of the periods in which the company would recognize revenue for such contract.

3Total Average Contract Term represents the dollar-weighted term, calculated on a billings basis, across all subscription and life-of-device contracts, using an assumed term of five years for life-of-device licenses, executed in the quarter.

4Total Revenue was negatively impacted by a year-over-year decline in the average contract term associated with Nutanix's ongoing transition to a subscription-based business model.

5New ACV with respect to any given contract is defined as (i) if the contract is (A) with a new customer, the aggregate value of such contract excluding professional services, or (B) with an existing customer, the aggregate value of any upsell / expansion under such contract excluding professional services, in each case divided by (ii) the number of years in the term of such contract, using an assumed term of five years for life-of-device licenses.

Non-GAAP Financial Measures and Other Key Performance Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial and other key performance measures: billings, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss, non-GAAP net loss per share, free cash flow, subscription revenue, subscription billings, Annual Contract Value Billings (or ACV Billings), New Annual Contract Value (or New ACV), Run-rate Annual Contract Value (or Run-rate ACV), and professional services billings. In computing these non-GAAP financial measures and key performance measures, we exclude certain items such as stock-based compensation and the related income tax impact, costs associated with our acquisitions (such as amortization of acquired intangible assets, income tax-related impact, and other acquisition-related costs), impairment of operating lease-related assets, change in fair value of derivative liability, amortization of debt discount and issuance costs, non-cash interest expense, other non-recurring transactions and the related tax impact, and the revenue and billings associated with pass-through hardware sales. Billings is a performance measure which we believe provides useful information to investors because it represents the amounts under binding purchase orders received by us during a given period that have been billed, and we calculate billings by adding the change in deferred revenue between the start and end of the period to total revenue recognized in the same period. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss, and non-GAAP net loss per share are financial measures which we believe provide useful information to investors because they provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures such as stock-based compensation expense that may not be indicative of our ongoing core business operating results. Free cash flow is a performance measure that we believe provides useful information to our management and investors about the amount of cash generated by the business after necessary capital expenditures, and we define free cash flow as net cash used in operating activities less purchases of property and equipment. Subscription revenue, subscription billings, and professional services billings are performance measures that we believe provide useful information to our management and investors as they allow us to better track the growth of the subscription-based portion of our business, which is a critical part of our business plan. ACV Billings, New ACV, and Run-rate ACV are performance measures that we believe provide useful information to our management and investors as they allow us to better track the topline growth of our business during our transition to a subscription-based business model because they take into account variability in term lengths. We use these non-GAAP financial and key performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. However, these non-GAAP financial and key performance measures have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Billings, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss, non-GAAP net loss per share, and free cash flow are not substitutes for total revenue, gross margin, operating expenses, net loss, net loss per share, or net cash (used in) provided by operating activities, respectively; subscription revenue is not a substitute for total revenue; and subscription and professional services billings are not substitutes for subscription and professional services revenue, respectively. There is no GAAP measure that is comparable to ACV Billings, New ACV or Run-rate ACV, so we have not reconciled the ACV Billings, New ACV and Run-rate ACV numbers included in this press release to any GAAP measure. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures and key performance measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures and key performance measures as tools for comparison. We urge you to review the reconciliation of our non-GAAP financial measures and key performance measures to the most directly comparable GAAP financial measures included below in the tables captioned “Reconciliation of Revenue to Billings,” “Disaggregation of Revenue and Billings,” “Reconciliation of Subscription and Professional Services Revenue to Subscription and Professional Services Billings,” “Reconciliation of GAAP to Non-GAAP Profit Measures,” and “Reconciliation of GAAP Net Cash Used In Operating Activities to Non-GAAP Free Cash Flow,” and not to rely on any single financial measure to evaluate our business.

Forward-Looking Statements

This press release contains express and implied forward-looking statements, including, but not limited to, statements regarding: our business plans, initiatives, objectives and outlook, including the actions we have taken to manage operating expenses and changes to the Company’s leadership structure and composition; our ability to execute such plans, initiatives and objectives successfully and in a timely manner, and the benefits and impact of such plans, initiatives and objectives, including our ability to continue executing on our business model transformation, manage our Chief Executive Officer transition, manage our expenses and decrease our cash usage in future periods, drive long-term value creation and sustained growth, and improve efficiency; the competitive market, including our competitive position and our projections about our market share and opportunity; our customer needs and our response to those needs; the benefits and capabilities of our platform, solutions, products, services and technology, including the interoperability and availability of our solutions with and on third-party platforms; our plans and expectations regarding new products, services, product features and technology, including those that are still under development or in process; our plans and timing for, and the success and impact of, our transition to a subscription-based business model and any changes in our guidance metrics; the timing and potential impact of the COVID-19 pandemic on the global market environment and the IT industry, as well as on our business, operations and financial results, including the changes we have made or anticipate making in response to the COVID-19 pandemic, our ability to manage our business during the pandemic, and the position we anticipate being in following the pandemic; and our guidance on estimated ACV Billings, non-GAAP gross margin, non-GAAP operating expenses and weighted average shares outstanding for any future fiscal periods. These forward-looking statements are not historical facts and instead are based on our current expectations, estimates, opinions, and beliefs. Consequently, you should not rely on these forward-looking statements. The accuracy of these forward-looking statements depends upon future events and involves risks, uncertainties, and other factors, including factors that may be beyond our control, that may cause these statements to be inaccurate and cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by such statements, including, among others: failure to successfully implement or realize the full benefits of, or unexpected difficulties or delays in successfully implementing or realizing the full benefits of, our business plans, initiatives and objectives; the timing, breadth, and impact of the COVID-19 pandemic on our business, operations, and financial results, as well as the impact on our customers, partners, and end markets; failure to successfully manage or realize the benefits of our Chief Executive Officer succession; failure to timely and successfully meet our customer needs; delays in or lack of customer or market acceptance of our new products, services, product features or technology; delays or unexpected accelerations in the transition to a subscription-based business model; the rapid evolution of the markets in which we compete; our ability to achieve, sustain and/or manage future growth effectively; factors that could result in the significant fluctuation of our future quarterly operating results, including, among other things, anticipated changes to our revenue and product mix, including changes as a result of our transition to a subscription-based business model, which will slow revenue growth during such transition and make forecasting future performance more difficult, the timing and magnitude of orders, shipments and acceptance of our solutions in any given quarter, our ability to attract new and retain existing end-customers, changes in the pricing of certain components of our solutions, and fluctuations in demand and competitive pricing pressures for our solutions; the introduction, or acceleration of adoption of, competing solutions, including public cloud infrastructure; and other risks detailed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2020, filed with the U.S. Securities and Exchange Commission, or the SEC, on September 23, 2020. Additional information will also be set forth in our Quarterly Report on Form 10-Q that will be filed for the fiscal quarter ended January 31, 2021 which should be read in conjunction with this press release and the financial results included herein. Our SEC filings are available on the Investor Relations section of the company’s website at ir.nutanix.com and on the SEC's website at www.sec.gov. These forward-looking statements speak only as of the date of this press release and, except as required by law, we assume no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any of these forward-looking statements to reflect actual results or subsequent events or circumstances.

About Nutanix

Nutanix is a global leader in cloud software and a pioneer in hyperconverged infrastructure solutions, making computing invisible anywhere. Organizations around the world use Nutanix software to leverage a single platform to manage any app at any location for their private, hybrid and multicloud environments. Learn more at www.nutanix.com or follow us on Twitter @nutanix.

© 2021 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or trademarks of Nutanix, Inc. in the United States and other countries. Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release contains links to external websites that are not part of Nutanix.com. Nutanix does not control these sites and disclaims all responsibility for the content or accuracy of any external site. Our decision to link to an external site should not be considered an endorsement of any content on such a site.

NUTANIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

As of

July 31,
2020

January 31,
2021

(in thousands, except per share data)

Assets

Current assets:

Cash and cash equivalents

$

318,737

$

298,701

Short-term investments

401,041

990,138

Accounts receivable, net

242,516

164,868

Deferred commissions—current

68,694

92,025

Prepaid expenses and other current assets

63,032

69,994

Total current assets

1,094,020

1,615,726

Property and equipment, net

143,172

131,971

Operating lease right-of-use assets

127,326

121,066

Deferred commissions—non-current

146,834

191,180

Intangible assets, net

49,392

40,702

Goodwill

185,260

185,260

Other assets—non-current

22,543

25,547

Total assets

$

1,768,547

$

2,311,452

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable

$

54,029

$

52,459

Accrued compensation and benefits

109,109

151,014

Accrued expenses and other current liabilities

25,924

26,130

Deferred revenue—current

534,572

578,664

Operating lease liabilities—current

36,569

41,309

Total current liabilities

760,203

849,576

Deferred revenue—non-current

648,869

667,627

Operating lease liabilities—non-current

116,794

107,784

Convertible senior notes, net

490,222

1,011,725

Derivative liability

397,290

Other liabilities—non-current

27,436

35,842

Total liabilities

2,043,524

3,069,844

Stockholders’ deficit:

Common stock

5

5

Additional paid-in capital

2,245,180

2,386,579

Accumulated other comprehensive income

2,030

557

Accumulated deficit

(2,522,192

)

(3,145,533

)

Total stockholders’ deficit

(274,977

)

(758,392

)

Total liabilities and stockholders’ deficit

$

1,768,547

$

2,311,452

NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

Three Months Ended
January 31,

Six Months Ended
January 31,

2020

2021

2020

2021

(in thousands)

Revenue:

Product

$

213,547

$

174,798

$

405,991

$

330,550

Support, entitlements and other services

133,220

171,584

255,544

328,586

Total revenue

346,767

346,382

661,535

659,136

Cost of revenue:

Product (1)(2)

20,676

13,784

41,909

26,598

Support, entitlements and other services (1)

54,547

57,170

105,515

112,315

Total cost of revenue

75,223

70,954

147,424

138,913

Gross profit

271,544

275,428

514,111

520,223

Operating expenses:

Sales and marketing (1)(2)

304,936

261,071

596,774

518,361

Research and development (1)

139,088

135,571

277,294

271,375

General and administrative (1)

34,579

35,034

67,439

68,808

Total operating expenses

478,603

431,676

941,507

858,544

Loss from operations

(207,059

)

(156,248

)

(427,396

)

(338,321

)

Other expense, net

(5,863

)

(126,001

)

(10,903

)

(204,733

)

Loss before provision for income taxes

(212,922

)

(282,249

)

(438,299

)

(543,054

)

Provision for income taxes

4,642

5,141

8,565

9,384

Net loss

$

(217,564

)

$

(287,390

)

$

(446,864

)

$

(552,438

)

Net loss per share attributable to Class A and Class B common stockholders—basic and diluted

$

(1.13

)

$

(1.42

)

$

(2.34

)

$

(2.72

)

Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders—basic and diluted

192,727

202,520

191,199

202,798

_________________________________________________

(1)

Includes the following stock-based compensation expense:

Three Months Ended
January 31,

Six Months Ended
January 31,

2020

2021

2020

2021

(in thousands)

Product cost of revenue

$

1,458

$

1,659

$

2,570

$

3,163

Support, entitlements and other services cost of revenue

5,140

5,764

9,891

11,525

Sales and marketing

31,185

30,031

58,960

62,258

Research and development

36,459

36,058

74,022

73,945

General and administrative

11,373

10,942

21,598

22,761

Total stock-based compensation expense

$

85,615

$

84,454

$

167,041

$

173,652

(2)

Includes the following amortization of intangible assets:

Three Months Ended
January 31,

Six Months Ended
January 31,

2020

2021

2020

2021

(in thousands)

Product cost of revenue

$

3,694

$

3,694

$

7,388

$

7,388

Sales and marketing

651

651

1,302

1,302

Total amortization of intangible assets

$

4,345

$

4,345

$

8,690

$

8,690

NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

Six Months Ended
January 31,

2020

2021

(in thousands)

Cash flows from operating activities:

Net loss

$

(446,864

)

$

(552,438

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

45,540

47,087

Stock-based compensation

167,041

173,652

Change in fair value of derivative liability

166,380

Amortization of debt discount and issuance costs

15,398

28,796

Operating lease cost, net of accretion

14,539

16,930

Impairment of lease-related assets

3,002

2,822

Non-cash interest expense

6,615

Other

(236

)

4,354

Changes in operating assets and liabilities:

Accounts receivable, net

(1,848

)

79,173

Deferred commissions

(35,422

)

(67,677

)

Prepaid expenses and other assets

9,064

(9,217

)

Accounts payable

(3,428

)

(2,602

)

Accrued compensation and benefits

20,085

39,593

Accrued expenses and other liabilities

974

2,100

Operating leases, net

(13,039

)

(16,523

)

Deferred revenue

146,540

61,325

Net cash used in operating activities

(78,654

)

(19,630

)

Cash flows from investing activities:

Maturities of investments

299,380

260,852

Purchases of investments

(416,636

)

(859,576

)

Sales of investments

24,147

2,999

Purchases of property and equipment

(39,451

)

(25,168

)

Net cash used in investing activities

(132,560

)

(620,893

)

Cash flows from financing activities:

Proceeds from sales of shares through employee equity incentive plans

26,486

21,904

Proceeds from the issuance of convertible notes, net of issuance costs

723,617

Repurchases of common stock

(125,079

)

Net cash provided by financing activities

26,486

620,442

Net decrease in cash, cash equivalents and restricted cash

$

(184,728

)

$

(20,080

)

Cash, cash equivalents and restricted cash—beginning of period

399,520

321,991

Cash, cash equivalents and restricted cash—end of period

$

214,792

$

301,911

Restricted cash (1)

3,099

3,210

Cash and cash equivalents—end of period

$

211,693

$

298,701

Supplemental disclosures of cash flow information:

Cash paid for income taxes

$

11,195

$

8,999

Supplemental disclosures of non-cash investing and financing

information:

Purchases of property and equipment included in accounts payable and

accrued and other liabilities

$

13,997

$

7,621

Finance lease liabilities arising from obtaining right-of-use assets

$

$

1,960

_________________________________________________

(1)

Included within other assets—non-current in the condensed consolidated balance sheets.

Reconciliation of Revenue to Billings

(Unaudited)

 

Three Months Ended
January 31,

Six Months Ended
January 31,

2020

2021

2020

2021

(in thousands)

Total revenue

$

346,767

$

346,382

$

661,535

$

659,136

Change in deferred revenue

81,310

39,131

146,540

61,325

Total billings

$

428,077

$

385,513

$

808,075

$

720,461

Disaggregation of Revenue and Billings

(Unaudited)

 

Three Months Ended
January 31,

Six Months Ended
January 31,

2020

2021

2020

2021

(in thousands)

Disaggregation of revenue:

Subscription revenue

$

266,544

$

305,946

$

484,440

$

584,111

Non-portable software revenue

59,131

21,661

136,702

41,704

Hardware revenue

8,542

1,321

18,266

2,050

Professional services revenue

12,550

17,454

22,127

31,271

Total revenue

$

346,767

$

346,382

$

661,535

$

659,136

Disaggregation of billings:

Subscription billings

$

339,142

$

339,168

$

614,680

$

633,091

Non-portable software billings

59,131

21,661

136,702

41,704

Hardware billings

8,542

1,321

18,266

2,050

Professional services billings

21,262

23,363

38,427

43,616

Total billings

$

428,077

$

385,513

$

808,075

$

720,461

Subscription — Subscription revenue includes any performance obligation which has a defined term, and is generated from the sales of software entitlement and support subscriptions, subscription software licenses and cloud-based Software as a Service, or SaaS offerings.

  • Ratable We recognize revenue from software entitlement and support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlement and support subscriptions.
  • Upfront Revenue from our subscription software licenses is generally recognized upfront upon transfer of control to the customer, which happens when we make the software available to the customer.

Non-portable software — Non-portable software revenue includes sales of our enterprise cloud platform when delivered on a configured-to-order appliance by us or one of our OEM partners. The software licenses associated with these sales are typically non-portable and have a term equal to the life of the appliance on which the software is delivered. Revenue from our non-portable software products is generally recognized upon transfer of control to the customer.

Hardware — In transactions where we deliver the hardware appliance, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis. We consider the amount allocated to hardware revenue to be equivalent to the cost of the hardware procured. Hardware revenue is generally recognized upon transfer of control to the customer.

Professional services — We also sell professional services with our products. We recognize revenue related to professional services as they are performed.

Annual Contract Value Billings and Run-rate Annual Contract Value

(Unaudited)

 

Three Months Ended
January 31,

Six Months Ended
January 31,

2020

2021

2020

2021

(in thousands)

Annual Contract Value Billings (ACV Billings)

$

139,529

$

159,208

$

256,965

$

285,956

Run-rate Annual Contract Value (Run-rate ACV)

$

1,080,931

$

1,384,823

$

1,080,931

$

1,384,823

Reconciliation of Subscription and Professional Services Revenue to Subscription and Professional Services Billings

(Unaudited)

 

Three Months Ended
January 31,

Six Months Ended
January 31,

2020

2021

2020

2021

(in thousands)

Subscription revenue

$

266,544

$

305,946

$

484,440

$

584,111

Change in subscription deferred revenue

72,598

33,222

130,240

48,980

Subscription billings

$

339,142

$

339,168

$

614,680

$

633,091

Professional services revenue

$

12,550

$

17,454

$

22,127

$

31,271

Change in professional services deferred revenue

8,712

5,909

16,300

12,345

Professional services billings

$

21,262

$

23,363

$

38,427

$

43,616

Reconciliation of GAAP to Non-GAAP Profit Measures

(Unaudited)

 

GAAP

Non-GAAP Adjustments

Non-GAAP

Three Months
Ended January
31, 2021

(1)

(2)

(3)

(4)

(5)

(6)

Three Months
Ended January
31, 2021

(in thousands, except percentages and per share data)

Gross profit

$

275,428

$

7,423

$

3,694

$

$

$

$

$

286,545

Gross margin

79.5

%

2.1

%

1.1

%

82.7

%

Operating expenses:

Sales and marketing

261,071

(30,031

)

(651

)

230,389

Research and development

135,571

(36,058

)

99,513

General and administrative

35,034

(10,942

)

(467

)

23,625

Total operating expenses

431,676

(77,031

)

(651

)

(467

)

353,527

Loss from operations

(156,248

)

84,454

4,345

467

(66,982

)

Net loss

$

(287,390

)

$

84,454

$

4,345

$

467

$

101,640

$

21,751

$

609

$

(74,124

)

Weighted shares outstanding, basic and diluted

202,520

202,520

Net loss per share, basic and diluted

$

(1.42

)

$

0.42

$

0.02

$

$

0.50

$

0.11

$

$

(0.37

)

_________________________________________________

(1)

Stock-based compensation

(2)

Amortization of intangible assets

(3)

Other

(4)

Change in fair value of derivative liability

(5)

Amortization of debt discount and issuance costs and non-cash interest expense

(6)

Income tax effect primarily related to stock-based compensation expense

GAAP

Non-GAAP Adjustments

Non-GAAP

Six Months
Ended
January 31,
2021

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Six Months
Ended
January 31,
2021

(in thousands, except percentages and per share data)

Gross profit

$

520,223

$

14,688

$

7,388

$

287

$

$

$

$

$

542,586

Gross margin

78.9

%

2.2

%

1.1

%

0.1

%

82.3

%

Operating expenses:

Sales and marketing

518,361

(62,258

)

(1,302

)

454,801

Research and development

271,375

(73,945

)

(2,535

)

194,895

General and administrative

68,808

(22,761

)

(973

)

45,074

Total operating expenses

858,544

(158,964

)

(1,302

)

(2,535

)

(973

)

694,770

Loss from operations

(338,321

)

173,652

8,690

2,822

973

(152,184

)

Net loss

$

(552,438

)

$

173,652

$

8,690

$

2,822

$

973

$

166,380

$

35,411

$

1,002

$

(163,508

)

Weighted shares outstanding, basic and diluted

202,798

202,798

Net loss per share, basic and diluted

$

(2.72

)

$

0.86

$

0.04

$

0.01

$

$

0.82

$

0.18

$

$

(0.81

)

_________________________________________________

(1)

Stock-based compensation

(2)

Amortization of intangible assets

(3)

Impairment of lease-related assets

(4)

Other

(5)

Change in fair value of derivative liability

(6)

Amortization of debt discount and issuance costs

(7)

Income tax effect primarily related to stock-based compensation expense

GAAP

Non-GAAP Adjustments

Non-GAAP

Three Months
Ended January
31, 2020

(1)

(2)

(3)

(4)

(5)

(6)

Three Months
Ended January
31, 2020

(in thousands, except percentages and per share data)

Gross profit

$

271,544

$

6,598

$

3,694

$

537

$

$

$

$

282,373

Gross margin

78.3

%

1.8

%

1.1

%

0.2

%

81.4

%

Operating expenses:

Sales and marketing

304,936

(31,185

)

(651

)

273,100

Research and development

139,088

(36,459

)

(2,465

)

100,164

General and administrative

34,579

(11,373

)

(154

)

23,052

Total operating expenses

478,603

(79,017

)

(651

)

(2,465

)

(154

)

396,316

Loss from operations

(207,059

)

85,615

4,345

3,002

154

(113,943

)

Net loss

$

(217,564

)

$

85,615

$

4,345

$

3,002

$

154

$

7,763

$

405

$

(116,280

)

Weighted shares outstanding, basic and diluted

192,727

192,727

Net loss per share, basic and diluted

$

(1.13

)

$

0.44

$

0.03

$

0.02

$

$

0.04

$

$

(0.60

)

_________________________________________________

(1)

Stock-based compensation

(2)

Amortization of intangible assets

(3)

Impairment of lease-related assets

(4)

Other

(5)

Amortization of debt discount and debt issuance costs

(6)

Income tax effect primarily related to stock-based compensation expense

GAAP

Non-GAAP Adjustments

Non-GAAP

Six Months
Ended January
31, 2020

(1)

(2)

(3)

(4)

(5)

(6)

Six Months
Ended January
31, 2020

(in thousands, except share and per share data)

Gross profit

$

514,111

$

12,461

$

7,388

$

537

$

$

$

$

534,497

Gross margin

77.7

%

1.9

%

1.1

%

0.1

%

80.8

%

Operating expenses:

Sales and marketing

596,774

(58,960

)

(1,302

)

536,512

Research and development

277,294

(74,022

)

(2,465

)

200,807

General and administrative

67,439

(21,598

)

(507

)

45,334

Total operating expenses

941,507

(154,580

)

(1,302

)

(2,465

)

(507

)

782,653

Loss from operations

(427,396

)

167,041

8,690

3,002

507

(248,156

)

Net loss

$

(446,864

)

$

167,041

$

8,690

$

3,002

$

507

$

15,398

$

618

$

(251,608

)

Weighted shares outstanding, basic and diluted

191,199

191,199

Net loss per share, basic and diluted

$

(2.34

)

$

0.87

$

0.05

$

0.02

$

$

0.08

$

$

(1.32

)

_________________________________________________

(1)

Stock-based compensation expense

(2)

Amortization of intangible assets

(3)

Impairment of lease-related assets

(4)

Other

(5)

Amortization of debt discount and issuance costs

(6)

Income tax effect primarily related to stock-based compensation expense

Reconciliation of GAAP Net Cash Used In Operating Activities to Non-GAAP Free Cash Flow

(Unaudited)

 

Three Months Ended

January 31,

Six Months Ended

January 31,

2020

2021

2020

2021

(in thousands)

Net cash used in operating activities

$

(52,491

)

$

(15,557

)

$

(78,654

)

$

(19,630

)

Purchases of property and equipment

(21,248

)

(12,916

)

(39,451

)

(25,168

)

Free cash flow

$

(73,739

)

$

(28,473

)

$

(118,105

)

$

(44,798

)

Contacts:

Investor Contact:
Tonya Chin
ir@nutanix.com

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