Markets

Why Nutanix Shares Skyrocketed Today

What happened

Shares of Nutanix (NASDAQ: NTNX) have skyrocketed today, up by 27% as of 11 a.m. EDT, after the enterprise hybrid cloud provider reported fiscal fourth-quarter earnings results. The company beat expectations for both the top and bottom lines.

So what

Revenue in the fiscal fourth quarter declined to $299.9 million, ahead of the $294 million in sales that analysts were modeling for. That translated into an adjusted net loss of $105.8 million, or $0.57 per share. Consensus estimates called for $0.64 per share in adjusted losses. Nutanix continues to transition to a subscription model, which helped adjusted gross margin to expand to a record 80%.

Blue and green stock chart going up

Image source: Getty Images.

Billings were $371.7 million during the quarter, and deferred revenue ballooned to $910 million. Subscription billings in the fiscal fourth quarter represented 71% of total billings, and subscription revenue accounted for 65% of total sales.

Now what

"We delivered a solid fourth quarter and believe our performance reflects our execution improvements and the meaningful progress we have made transitioning our business to a subscription model," CEO Dheeraj Pandey said in a statement. "We are encouraged by our record gross margins, strengthening pipeline, progress in sales hiring, and recent large customer wins."

In terms of guidance for the first quarter of fiscal 2020, the company expects software and support revenue to be $290 million to $300 million, with software and support billings of $360 million to $370 million. Hardware is expected to represent 3% or less of total billings and adjusted gross margin should be around 80%. Nutanix guided for an adjusted net loss of $0.75 per share.

10 stocks we like better than Nutanix
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Nutanix wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 1, 2019

 

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool recommends Nutanix. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

NTNX

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More