Nutanix NTNX incurred third-quarter fiscal 2020 loss of 69 cents per share, beating the Zacks Consensus Estimate by 18.8%. However, the figure was wider than the year-ago loss of 56 cents.
Revenues increased 11% year over year to $318.3 million and also beat the consensus mark by 1.1%.
Product revenues (57% of revenues) fell 2.2% year over year to $180.8 million, primarily due to an 82.7% slump in hardware revenues, partially offset by 8.6% growth in software revenues.
Support, entitlements & other services revenues (43% of revenues) surged 33.7% to $137.5 million.
Total Contract Value (TCV) revenues increased 18.3% year over year to $314.5 million.
Nutanix Inc. Price, Consensus and EPS Surprise
Nutanix Inc. price-consensus-eps-surprise-chart | Nutanix Inc. Quote
Top Line Details
Subscription revenues (82% of revenues) jumped 54.9% from the year-ago quarter to $261 million. Professional services revenues (3.6% of revenues) grew 34.9% to $11.6 million.
Non-Portable Software revenues (13.2% of revenues) plunged 52.8% year over year to $41.9 million. Moreover, hardware revenues (1.2% of revenues) plummeted 82.7% to $3.8 million.
Billings were up 10.8% year over year to $383.5 million. Software and Support billings were $379.7 million, up 17.1% year over year.
During the fiscal third quarter, the company added 700 new customers, bringing the total client numbers to 16,580.
In the fiscal third quarter, the company’s non-GAAP gross profit of $257 million was up 15.9% year over year. Non-GAAP gross margin was 80.7%, up from the 77.1% reported in the year-ago quarter.
Operating expenses on a non-GAAP basis flared up 19.5% year over year to $390.3 million.
Operating loss on a non-GAAP basis widened to $133.3 million from the year-ago quarter’s $104.8-million loss.
Balance Sheet & Cash Flow
As of Apr 30, 2020, cash and cash equivalents plus short-term investments were $732 million compared with $819 million as of Jan 31, 2020.
Cash outflow from operations was $163.5 million compared with the outflow of $52.5 million witnessed in the previous quarter.
Free cash outflow was $117.5 million compared with the prior quarter’s $73.7 million.
Deferred revenues surged 34% year over year to $1.12 billion at the end of the reported quarter.
Zacks Rank & Other Stocks to Consider
Nutanix currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader technology sector are NVIDIA Corporation NVDA, Apple Inc. AAPL and Fortinet, Inc. FTNT, all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for NVIDIA, Apple and Fortinet is currently pegged at 16.9%, 10.7% and 14%, respectively.
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