Shares of Nutanix (NTNX 6.27%) climbed as much as 9.2% early Thursday, then settled to trade up 3.5% as of 2:30 p.m. ET after the cloud-computing and hyperconverged-infrastructure (HCI) specialist announced strong quarterly results.
For its fiscal first quarter in 2024 (ended Oct. 31, 2023), Nutanix's revenue grew 18% year over year to $511.1 million, translating to adjusted (non-GAAP) net income of $85 million, or $0.29 per share. Analysts, on average, were only expecting earnings of $0.17 per share on revenue of $500 million.
NASDAQ: NTNX
Key Data Points
On Nutanix's outperformance despite macro challenges
"We delivered a solid first quarter financial performance against an uncertain macro backdrop reflecting the value our customers see in the Nutanix Cloud Platform and the strength of our subscription business model," stated Nutanix CEO Rajiv Ramaswami.
Nutanix's annual contract value (ACV) billings -- a key metric helping analysts measure future growth -- climbed 24% year over year during the quarter, to $278.2 million, and annual recurring revenue (ARR) grew 30% to $1.66 billion by the end of the quarter. Average contract duration also modestly contracted to 2.9 years from exactly 3 years at this point a year ago.
Meanwhile, Nutanix's quarterly free cash flow nearly tripled from the same year-ago period, to $132.5 million.
What's next for Nutanix investors?
Nutanix also provided fiscal second-quarter 2024 guidance for revenue in the range of $545 million to $555 million, well above consensus estimates for fiscal Q2 revenue closer to $534 million.
Finally, Nutanix raised its full fiscal-year outlook to call for revenue of $2.095 billion to $2.125 billion, up from its previous range of $2.085 billion to $2.115 billion and above estimates for $2.09 billion.
All told, with Nutanix's transition to a recurring subscription-based revenue model essentially complete, this was another exceptional quarter punctuated by resilience in spite of difficult macroeconomic conditions. Even with shares trading near a 52-week high today, I think the stock has plenty of room to run higher from here.
