Summary
Nutanix's fiscal 2022 second quarter showed steady top-line growth and a smaller loss. Revenue was $413.08 million for the quarter, up 19.3% from the prior-year quarter, while gross profit rose 20.9% to $333.11 million. Gross margin reached 80.6%, up 1.1 percentage points. The operating loss narrowed to $94.42 million, and the net loss narrowed to $115.06 million. Diluted EPS was -$0.53. The company generated $25.77 million of operating cash flow for the quarter, up from the prior-year quarter. Capital expenditures were $8.55 million, down 33.8%. Deferred revenue ended the quarter at $1.39 billion, up 11.3%.
On a year-to-date basis, revenue was $791.60 million, up 20.1%, and gross profit was $630.18 million, up 21.1%. The year-to-date operating loss narrowed to $231.68 million, and the year-to-date net loss narrowed to $534.91 million. Year-to-date diluted EPS was -$2.47. Operating cash flow was $32.71 million for the year to date, up from the prior-year period, and capital expenditures were $17.39 million, down 30.9%.
Non-GAAP metrics point to a business gaining traction. Annual contract value billings were $217.9 million, up 37%. Annual recurring revenue was $1.04 billion, up 55%. Run-rate ACV was $1.68 billion, up 21%. Average contract term was 3.1 years, versus 3.4 years in the prior-year quarter. Free cash flow was $17.2 million, compared with negative $28.5 million in the prior-year quarter. Total billings were $464.5 million. Nutanix ended the quarter with 21,400 end customers, including about 960 Global 2000 enterprises. Roughly 71% of end customers with 18 months or longer of tenure made a repeat purchase. Those customers have lifetime orders more than 6.7 times their initial order on average, and the multiple rises to 18.8 times for Global 2000 accounts. The company launched its simplified product portfolio, eliminated its dual-class stock structure on January 3, 2022, added Gayle Sheppard to its board on January 28, 2022, and published its fourth Global Enterprise Cloud Index survey, which drew input from 1,700 IT decision makers. Nutanix Files was named a Leader and Outperformer in GigaOm's Scale-Out File Systems Radar report.
The third-quarter fiscal 2022 outlook puts ACV billings at $195 million to $200 million and the top line at $395 million to $400 million. Management also guided non-GAAP gross margin of approximately 82% for the third quarter, non-GAAP operating expenses of $365 million to $370 million, and weighted average shares outstanding of approximately 222 million. The full fiscal year 2022 outlook puts ACV billings at $760 million to $765 million and the top line at $1.625 billion to $1.630 billion. Full-year non-GAAP gross margin is guided to approximately 82.5%, and non-GAAP operating expenses are guided to $1.465 billion to $1.470 billion.
Several risks deserve attention. Management flagged higher-than-normal attrition among sales representatives and said replacing, training, and ramping new hires takes time. As of January 31, 2022, about 76% of the global sales team was fully ramped, while about 24% was still ramping. The subscription transition keeps shortening average contract terms, which can hold back billings and revenue in any single period. Supply chain disruptions, higher component prices, and the COVID-19 pandemic could weigh on demand, sales cycles, and hardware availability. Competition from public cloud infrastructure remains a persistent threat. The balance sheet carries a large convertible debt load. Sales and marketing headcount fell 11% from January 31, 2021 to January 31, 2022, while research and development headcount rose 13% and general and administrative headcount rose 17%. Management expects operating and free cash flow to keep fluctuating over the next 12 months.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $413.1M | $378.5M | +9.1% | $346.4M | +19.3% |
| Gross profit | $333.1M | $297.1M | +12.1% | $275.4M | +20.9% |
| Gross margin | 80.6% | 78.5% | +2.2 pp | 79.5% | +1.1 pp |
| Research & development | $141.6M | $144.3M | -1.8% | $135.6M | +4.5% |
| Sales & marketing | $241.6M | $250.0M | -3.4% | $261.1M | -7.4% |
| General & administrative | $44.3M | $40.0M | +10.7% | $35.0M | +26.4% |
| Total operating expenses | $427.5M | $434.3M | -1.6% | $431.7M | -1.0% |
| Operating income (loss) | -$94.4M | -$137.3M | +31.2% | -$156.2M | +39.6% |
| Operating margin | -22.9% | -36.3% | +13.4 pp | -45.1% | +22.3 pp |
| Net income (loss) | -$115.1M | -$419.9M | +72.6% | -$287.4M | +60.0% |
| Net margin | -27.9% | -110.9% | +83.1 pp | -83.0% | +55.1 pp |
Risks
The company has recently seen higher than normal attrition among sales representatives, and as of January 31, 2022 approximately 24% of its global sales team was still in the process of ramping up. This may reduce near-term sales productivity and slow revenue growth even as total revenue rose 19.3% year over year in FY2022 Q2.
The shift to subscription term-based licenses compresses average contract duration, with total average contract term at approximately 3.1 years for both the three and six months ended January 31, 2022, compared with 3.4 years and 3.5 years in the prior-year periods. Shorter terms can lower billings, revenue and cash flow in a given period, and customer pricing confusion may slow adoption and renewals.
The ongoing COVID-19 pandemic has curtailed demand for certain solutions, reduced IT spending, and caused delays or abandonment of planned purchases, particularly with new customers and partners. Management continues to expect uncertainty from new variants and related operational restrictions.
Reduced manufacturing capacity caused by the pandemic is expected to increase prices of certain components used in hardware platforms, potentially raising hardware costs for end customers. The company also cites delays in shipping and customer acceptance of hardware platforms on which its software runs.
The broad technology shift toward hybrid cloud, entrenched customer relationships with existing IT vendors, and the subscription model transition can lead to unpredictable sales cycles. Management aims to compress and stabilize these cycles as market adoption and channel leverage increase.
The subscription transition may create customer concerns about pricing changes over time and cause confusion among new and existing end customers, which can slow adoption and renewal rates. Renewals are increasingly significant for future revenue as existing subscriptions come up for renewal.
SaaS KPIs
All quarters →Free Cash Flow
Annual Recurring Revenue (ARR)
Non-GAAP Gross Margin
Total Billings
Subscription Billings
Total end customers
Repeat purchase rate (18+ months)
Annual Contract Value (ACV) Billings
Average Contract Term
Subscription Revenue
Global 2000 End Customers
Run-rate Annual Contract Value (ACV)
Summary, forecast, risks and KPIs are extracted from Nutanix, Inc.'s SEC filings for Q2 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.