Summary
Nutanix closed FY2024 Q3 with revenue of $524.6 million, up 16.9% year over year. Year-to-date revenue reached $1.60 billion, up 17.0%. Gross profit in the quarter was $444.96 million, up 21.5%, and gross margin expanded to 84.8%, up 3.2 percentage points. The company still posted a GAAP operating loss of $11.59 million, but the loss narrowed from the prior-year quarter. Operating margin improved to negative 2.2%, up 10.9 percentage points year over year. Net loss for the quarter was $15.62 million, or negative $0.06 per diluted share, also a narrowed loss. On a year-to-date basis, Nutanix swung to net income of $1.33 million, or $0.05 per diluted share.
Cash generation remained a highlight. Net cash provided by operating activities was $96.35 million in the quarter, up 29.3% year over year, and $428.23 million for the first nine months, up 100.0%. Capital expenditures were $18.03 million in the quarter, down 17.4%, and $54.81 million year to date, up 4.2%. Free cash flow, a non-GAAP measure, was $78.3 million for the quarter and $373.4 million year to date. Deferred revenue on the balance sheet stood at $1.75 billion, up 13.2% from a year earlier.
Operational momentum showed in the key performance measures. Annual recurring revenue reached $1.82 billion, up 24% year over year, while ACV billings were $288.9 million, up 20%. Total billings were $557.3 million. Nutanix ended the quarter with 25,860 end customers, including roughly 1,040 Global 2000 enterprises. About 81% of the global sales team was fully ramped, leaving 19% still ramping. Among customers with at least 18 months of tenure, about 75% made a repeat purchase, and their lifetime orders averaged more than 8.4 times the initial order. For Global 2000 customers in that group, the average was about 29.0 times. The company used its .NEXT Barcelona event to launch the Nutanix AI Partner Program, GPT-in-a-Box 2.0, and the Nutanix Kubernetes Platform, while expanding ties with NVIDIA, Dell Technologies, EDB, and Wipro. Non-GAAP gross margin was 86.5%, non-GAAP operating income was $73.3 million, and non-GAAP operating margin was 14.0%.
Guidance points to continued growth but a sequential margin step-down in the next quarter. For FY2024 Q4, Nutanix guided revenue of $530 million to $540 million, ACV billings of $295 million to $305 million, non-GAAP gross margin of 85% to 86%, and non-GAAP operating margin of 9% to 10%. For the full fiscal year 2024, the company guided revenue of $2.13 billion to $2.14 billion, ACV billings of $1.12 billion to $1.13 billion, non-GAAP gross margin of about 86%, non-GAAP operating margin of about 15%, and free cash flow of $520 million to $540 million. The main risks include the material weakness in internal control over financial reporting that Nutanix previously identified, macroeconomic and geopolitical uncertainty, supply chain delays, competition from public cloud providers, and greater variability from larger deals. The company also depends on channel and OEM partners and on newly hired sales staff becoming productive. In June 2024, BCPE Nucleon delivered a notice to convert $817.6 million aggregate principal amount of the 2026 Notes, which Nutanix expects to settle with $817.6 million in cash and about 16.9 million shares in the fiscal quarter ending July 31, 2024. Nutanix has a $350 million share repurchase authorization in place.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $524.6M | $565.2M | -7.2% | $448.6M | +16.9% |
| Gross profit | $445.0M | $483.7M | -8.0% | $366.2M | +21.5% |
| Gross margin | 84.8% | 85.6% | -0.8 pp | 81.6% | +3.2 pp |
| Research & development | $159.2M | $160.4M | -0.7% | $143.0M | +11.3% |
| Sales & marketing | $245.9M | $236.7M | +3.9% | $229.3M | +7.3% |
| General & administrative | $51.4M | $49.5M | +3.8% | $52.5M | -2.1% |
| Total operating expenses | $456.5M | $446.6M | +2.2% | $424.8M | +7.5% |
| Operating income (loss) | -$11.6M | $37.0M | -131.3% | -$58.6M | +80.2% |
| Operating margin | -2.2% | 6.5% | -8.8 pp | -13.1% | +10.9 pp |
| Net income (loss) | -$15.6M | $32.8M | -147.6% | -$71.0M | +78.0% |
| Net margin | -3.0% | 5.8% | -8.8 pp | -15.8% | +12.8 pp |
| Diluted EPS | -$0.06 | $0.12 | -$0.18 | -$0.30 | +$0.24 |
Risks
New risk factor: on June 6, 2024 BCPE Nucleon (DE) SPV, LP delivered a notice to convert $817.6 million aggregate principal amount of the 2026 Notes, representing all outstanding principal. Nutanix must settle by paying $817.6 million in cash and delivering approximately 16.9 million shares of Class A common stock during the fiscal quarter ending July 31, 2024, which will require a significant portion of liquidity, dilute existing stockholders, and may depress the price of its securities.
MD&A states the sales pipeline has evolved to include a higher mix of larger deal opportunities that often take longer to close, involve greater executive review and competition, and have greater variability in timing, outcome and deal structure. This trend is expected to drive greater variability in new and expansion business, and topline results may be adversely affected.
MD&A notes subscription term-based license revenue is generally recognized upfront, so any decline in average contract durations would negatively impact topline results. The nine months ended April 30, 2024 had a total average contract duration of approximately 2.9 years, compared with approximately 3.0 years for the nine months ended April 30, 2023.
MD&A states that as of April 30, 2024, approximately 81% of the global sales team was fully ramped and approximately 19% was still ramping. It may take longer for newer and existing sales team members focused on major accounts and large deals to become fully productive, potentially impacting overall sales team productivity.
MD&A warns that reliance on manufacturers, channel partners and OEMs to produce the hardware platforms on which Nutanix software runs exposes the company to supply chain delays, which could impair its ability to provide services to end customers in a timely manner.
MD&A states that the subscription-based business model and product transitions may cause customer concerns about pricing over time and create confusion regarding pricing models. Such concerns or confusion can slow adoption and renewal rates among current and future customers.
MD&A notes the company previously identified control deficiencies that, individually or in the aggregate, constitute a material weakness in internal control over financial reporting, with remediation efforts referenced. This may affect reliability of financial reporting and requires continued remediation.
SaaS KPIs
All quarters →Free Cash Flow
Annual Recurring Revenue (ARR)
Non-GAAP Gross Margin
Total Billings
Non-GAAP Operating Margin
Annual Contract Value (ACV) Billings
Average Contract Duration
Global 2000 enterprises
Summary, forecast, risks and KPIs are extracted from Nutanix, Inc.'s SEC filings for Q3 FY2024 (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.