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Nutanix, Inc. (NTNX) SEC Filing 8-K Material Event for the period ending Wednesday, March 2, 2022

Nutanix, Inc.

CIK: 1618732 Ticker: NTNX
 
 Exhibit 99.1

Nutanix Reports Second Quarter Fiscal 2022 Financial Results

Reports 37% YoY ACV Billings Growth and 19% YoY Revenue Growth

Renewals Growth Helps Drive Record ACV Billings

SAN JOSE, Calif.--(BUSINESS WIRE)--March 2, 2022--Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced financial results for its second quarter ended January 31, 2022.

“Our second quarter reflected continued solid execution, demonstrating strong year-over-year top and bottom-line improvement,” said Rajiv Ramaswami, President and CEO of Nutanix. “We also see growing momentum towards adoption of hybrid multicloud models and believe the recent launch of our hybrid multicloud solution portfolio will strengthen our ability to deliver the solutions our customers need.”

“In our second quarter, we achieved record ACV billings, which grew 37% year-over-year, and saw 19% year-over-year revenue growth,” said Duston Williams, CFO of Nutanix. “We saw good execution on our building base of subscription renewals and generated positive free cash flow in the quarter - both reflections of continued progress on our subscription model.”

Second Quarter Fiscal 2022 Financial Summary

 

Q2 FY’22

Q2 FY’21

Y/Y Change

Annual Contract Value (ACV)1 Billings

$217.9 million

$159.2 million

37%

Annual Recurring Revenue (ARR)2

$1.04 billion

$672.8 million

55%

Run-rate Annual Contract Value (ACV)3

$1.68 billion

$1.38 billion

21%

Average Contract Term4

3.1 years

3.4 years

(0.3) year

Revenue5

$413.1 million

$346.4 million

19%

GAAP Gross Margin

80.6%

79.5%

110 bps

Non-GAAP Gross Margin

83.8%

82.7%

110 bps

GAAP Operating Expenses

$427.5 million

$431.7 million

(1)%

Non-GAAP Operating Expenses

$347.3 million

$353.5 million

(2)%

Free Cash Flow

$17.2 million

$(28.5) million

$45.7 million


Reconciliations between GAAP and non-GAAP financial measures and key performance measures, to the extent available, are provided in the tables of this press release.

Recent Company Highlights

  • Launched Simplified Product Portfolio: Nutanix announced the global availability of its simplified product portfolio, making it easier for customers to execute on their hybrid multicloud strategies and removing the complexity often associated with enabling a full range of hybrid cloud services across multiple environments.
  • Appointed Gayle Sheppard to its Board of Directors:
    Nutanix announced that it added Gayle Sheppard to its board of directors, effective January 28, 2022. Ms. Sheppard currently serves as Corporate Vice President and Head of Global Expansion and Digital Transformation for Microsoft Cloud and AI, and brings deep cloud experience to Nutanix’s board of directors.
  • Released Fourth Global Enterprise Cloud Index (ECI) report: Nutanix announced the findings of its fourth ECI survey and research report, which measures enterprise progress with cloud adoption. Feedback from 1,700 IT decision makers around the world revealed that multicloud deployments are on the rise, but that enterprises are also looking for simpler management across mixed-cloud infrastructures.
  • Eliminated its Dual-Class Stock Structure: Nutanix announced that, effective January 3, 2022, all then outstanding shares of its Class B common stock were automatically converted into Class A common stock on a one-for-one basis, resulting in a single class of common stock with equal voting rights.
  • Nutanix Files Recognized as a Leader and Outperformer in Industry Report: Nutanix Files was named a Leader and Outperformer in GigaOm’s Scale-Out File Systems Radar report.

Third Quarter Fiscal 2022 Outlook

 

 

ACV Billings

$195 - $200 million

Revenue

$395 - $400 million

Non-GAAP Gross Margin

Approximately 82%

Non-GAAP Operating Expenses

$365 - $370 million

Weighted Average Shares Outstanding

Approximately 222 million

Fiscal 2022 Outlook

 

 

ACV Billings

$760 - $765 million

Revenue

$1.625 - $1.630 billion

Non-GAAP Gross Margin

Approximately 82.5%

Non-GAAP Operating Expenses

$1.465 - $1.470 billion

Supplementary materials to this press release, including our second quarter fiscal 2022 earnings presentation, can be found at https://ir.nutanix.com/company/financial.


Webcast and Conference Call Information

Nutanix executives will discuss the company’s second quarter fiscal 2022 financial results on a conference call at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. To listen to the call via telephone, dial 1-844-200-6205 from within the United States or +1 929-526-1599 from outside the United States. The access code is 542097. This call will be webcast live and available to all interested parties on our Investor Relations website at ir.nutanix.com. Shortly after the conclusion of the conference call, a replay of the audio webcast will be available on our Investor Relations website. A telephonic replay will be available for one week and can be accessed by calling 1-866-813-9403 or +44 204-525-0658, and entering the access code 528747.

Definitions and Total Revenue Impact

1Annual Contract Value, or ACV, is defined as the total annualized value of a contract, excluding amounts related to professional services and hardware. The total annualized value for a contract is calculated by dividing the total value of the contract by the number of years in the term of such contract, using, where applicable, an assumed term of five years for contracts that do not have a specified term. ACV Billings, for any given period, is defined as the sum of the ACV for all contracts billed during the given period. ACV Billings is the sum of New ACV Billings and Renewals ACV Billings.

2Annual Recurring Revenue, or ARR, for any given period, is defined as the sum of ACV for all non life-of-device contracts in effect as of the end of a specific period. For the purposes of this calculation, we assume that the contract term begins on the date a contract is booked, unless the terms of such contract prevent us from fulfilling our obligations until a later period, and irrespective of the periods in which we would recognize revenue for such contract.

3Run-rate ACV, at the end of any period, is the sum of ACV for all contracts that are in effect as of the end of that period. For the purposes of this calculation, we assume that the contract term begins on the date a contract is booked, irrespective of the periods in which we would recognize revenue for such contract.

4Average Contract Term represents the dollar-weighted term, calculated on a billings basis, across all subscription and life-of-device contracts, using an assumed term of five years for life-of-device licenses, executed in the period.

5Revenue was negatively impacted by a year-over-year decline in the average contract term associated with Nutanix’s ongoing transition to a subscription-based business model.


Non-GAAP Financial Measures and Other Key Performance Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, this press release includes the following non-GAAP financial and other key performance measures: billings, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss, non-GAAP net loss per share, free cash flow, subscription revenue, subscription billings, Annual Contract Value Billings (or ACV Billings), Annual Recurring Revenue (or ARR), Run-rate Annual Contract Value (or Run-rate ACV) and Average Contract Term. In computing these non-GAAP financial measures and key performance measures, we exclude certain items such as stock-based compensation and the related income tax impact, costs associated with our acquisitions (such as amortization of acquired intangible assets, income tax-related impact, and other acquisition-related costs), impairment (recovery) of operating lease-related assets, the change in fair value of the derivative liability, the amortization of the debt discount and issuance costs, interest expense related to convertible senior notes, loss on debt extinguishment, other non-recurring transactions and the related tax impact, and the revenue and billings associated with pass-through hardware sales. Billings is a performance measure which we believe provides useful information to investors because it represents the amounts under binding purchase orders received by us during a given period that have been billed, and we calculate billings by adding the change in deferred revenue between the start and end of the period to total revenue recognized in the same period. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss, and non-GAAP net loss per share are financial measures which we believe provide useful information to investors because they provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures such as stock-based compensation expense that may not be indicative of our ongoing core business operating results. Free cash flow is a performance measure that we believe provides useful information to our management and investors about the amount of cash generated by the business after necessary capital expenditures, and we define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment. Subscription revenue and subscription billings are performance measures that we believe provide useful information to our management and investors as they allow us to better track the growth of the subscription-based portion of our business, which is a critical part of our business plan. ACV Billings and Run-rate ACV are performance measures that we believe provide useful information to our management and investors as they allow us to better track the topline growth of our business during our transition to a subscription-based business model because they take into account variability in term lengths. ARR is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the topline growth of our subscription business because it takes into account variability in term lengths. We use these non-GAAP financial and key performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. However, these non-GAAP financial and key performance measures have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Billings, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss, non-GAAP net loss per share, and free cash flow are not substitutes for total revenue, gross margin, operating expenses, net loss, net loss per share, or net cash provided by (used in) operating activities, respectively; subscription revenue is not a substitute for total revenue; and subscription billings is not a substitute for subscription revenue. There is no GAAP measure that is comparable to ACV Billings, ARR, Run-rate ACV, or Average Contract Term, so we have not reconciled the ACV Billings, ARR, Run-rate ACV, or Average Contract Term data included in this press release to any GAAP measure. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures and key performance measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures and key performance measures as tools for comparison. We urge you to review the reconciliation of our non-GAAP financial measures and key performance measures to the most directly comparable GAAP financial measures included below in the tables captioned “Reconciliation of Revenue to Billings,” “Disaggregation of Revenue and Billings,” “Reconciliation of Subscription and Professional Services Revenue to Subscription and Professional Services Billings,” “Reconciliation of GAAP to Non-GAAP Profit Measures,” and “Reconciliation of GAAP Net Cash Provided By (Used In) Operating Activities to Non-GAAP Free Cash Flow,” and not to rely on any single financial measure to evaluate our business.


Forward-Looking Statements

This press release contains express and implied forward-looking statements, including, but not limited to, statements regarding: our business plans, strategies, initiatives, vision, objectives, and outlook (including our growth plan) as well as our ability to execute thereon successfully and in a timely manner and the benefits and impact thereof on our business, operations, and financial results (including our third quarter fiscal 2022 outlook, our fiscal 2022 outlook, and our expectation that the recent launch of our hybrid multicloud solution portfolio will strengthen our ability to deliver the solutions our customers need); our plans for, and the timing of, any current and future business model transitions, including our ongoing transition to a subscription-based business model, our ability to manage, complete or realize the benefits of such transitions successfully and in a timely manner, and the short-term and long-term impacts of such transitions on our business, operations and financial results; the competitive market, including our competitive position and ability to compete effectively, the competitive advantages of our products, our projections about our market share and opportunity, and the effects of increased competition in our market; our ability to attract new end customers and retain and grow sales from our existing end customers; our customer needs and our response to those needs; our ability to form new, and maintain and strengthen existing, strategic alliances and partnerships, including our relationships with our channel partners and original equipment manufacturers, and the impact of any changes to such relationships on our business, operations and financial results; the benefits and capabilities of our platform, solutions, products, services and technology, including the interoperability and availability of our solutions with and on third-party platforms; our plans and expectations regarding new solutions, products, services, product features and technology, including those that are still under development or in process; our plans regarding, and the timing and success of, our customer, partner, industry, analyst, investor and employee events and the impact thereof on our business, operations, and financial results; the timing and potential impact of the COVID-19 pandemic on the global market environment and the IT industry, as well as on our business, operations and financial results, including the changes we have made or anticipate making in response to the COVID-19 pandemic, our ability to manage our business during the pandemic, and the position we anticipate being in following the pandemic; and our decision to use new or different metrics, or to make adjustments to the metrics we use, to supplement our financial reporting, and the impact thereof.


These forward-looking statements are not historical facts and instead are based on our current expectations, estimates, opinions, and beliefs. Consequently, you should not rely on these forward-looking statements. The accuracy of these forward-looking statements depends upon future events and involves risks, uncertainties, and other factors, including factors that may be beyond our control, that may cause these statements to be inaccurate and cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by such statements, including, among others: failure to successfully implement or realize the full benefits of, or unexpected difficulties or delays in successfully implementing or realizing the full benefits of, our business plans, strategies, initiatives, vision, and objectives; our ability to achieve, sustain and/or manage future growth effectively; delays or unexpected accelerations in our current and future business model transitions; the rapid evolution of the markets in which we compete, including the introduction, or acceleration of adoption of, competing solutions, including public cloud infrastructure; failure to timely and successfully meet our customer needs; delays in or lack of customer or market acceptance of our new solutions, products, services, product features or technology; macroeconomic or geopolitical conditions; the timing, breadth, and impact of the COVID-19 pandemic on our business, operations, and financial results, as well as the impact on our customers, partners, and end markets; factors that could result in the significant fluctuation of our future quarterly operating results, including, among other things, anticipated changes to our revenue and product mix, including changes as a result of our transition to a subscription-based business model, which will slow revenue growth during such transition and make forecasting future performance more difficult, the timing and magnitude of orders, shipments and acceptance of our solutions in any given quarter, our ability to attract new and retain existing end-customers, changes in the pricing and availability of certain components of our solutions, and fluctuations in demand and competitive pricing pressures for our solutions; and other risks detailed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2021 filed with the U.S. Securities and Exchange Commission, or the SEC, on September 21, 2021 and our Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2021 filed with the SEC on December 2, 2021. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2022, which should be read in conjunction with this press release and the financial results included herein. Our SEC filings are available on the Investor Relations section of our website at ir.nutanix.com and on the SEC's website at www.sec.gov. These forward-looking statements speak only as of the date of this press release and, except as required by law, we assume no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any of these forward-looking statements to reflect actual results or subsequent events or circumstances.

About Nutanix

Nutanix is a global leader in cloud software and a pioneer in hyperconverged infrastructure solutions, making clouds invisible, freeing customers to focus on their business outcomes. Organizations around the world use Nutanix software to leverage a single platform to manage any app at any location for their hybrid multicloud environments. Learn more at www.nutanix.com or follow us on social media @nutanix.

© 2022 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or trademarks of Nutanix, Inc. in the United States and other countries. Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release contains links to external websites that are not part of Nutanix.com. Nutanix does not control these sites and disclaims all responsibility for the content or accuracy of any external site. Our decision to link to an external site should not be considered an endorsement of any content on such a site.


NUTANIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)




 

 

 

As of

 

 

 

July 31,
2021

 

January 31,
2022

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

285,723

 

 

$

400,749

 

Short-term investments

 

 

928,006

 

 

 

891,026

 

Accounts receivable, net

 

 

180,781

 

 

 

159,938

 

Deferred commissions—current

 

 

110,935

 

 

 

109,607

 

Prepaid expenses and other current assets

 

 

56,816

 

 

 

60,404

 

Total current assets

 

 

1,562,261

 

 

 

1,621,724

 

Property and equipment, net

 

 

131,621

 

 

 

117,609

 

Operating lease right-of-use assets

 

 

105,903

 

 

 

91,519

 

Deferred commissions—non-current

 

 

232,485

 

 

 

247,144

 

Intangible assets, net

 

 

32,012

 

 

 

23,866

 

Goodwill

 

 

185,260

 

 

 

185,260

 

Other assets—non-current

 

 

27,954

 

 

 

28,468

 

Total assets

 

$

2,277,496

 

 

$

2,315,590

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

47,056

 

 

$

46,900

 

Accrued compensation and benefits

 

 

162,337

 

 

 

149,989

 

Accrued expenses and other current liabilities

 

 

39,404

 

 

 

37,589

 

Deferred revenue—current

 

 

636,421

 

 

 

703,803

 

Operating lease liabilities—current

 

 

42,670

 

 

 

43,585

 

Convertible senior notes, net—current

 

 

 

 

 

145,160

 

Total current liabilities

 

 

927,888

 

 

 

1,127,026

 

Deferred revenue—non-current

 

 

676,502

 

 

 

683,068

 

Operating lease liabilities—non-current

 

 

86,599

 

 

 

66,016

 

Convertible senior notes, net

 

 

1,055,694

 

 

 

1,126,461

 

Derivative liability

 

 

500,175

 

 

 

 

Other liabilities—non-current

 

 

42,679

 

 

 

38,636

 

Total liabilities

 

 

3,289,537

 

 

 

3,041,207

 

Stockholders’ deficit:

 

 

 

 

 

 

Common stock

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

2,615,317

 

 

 

3,382,214

 

Accumulated other comprehensive income

 

 

(8

)

 

 

(2,435

)

Accumulated deficit

 

 

(3,627,355

)

 

 

(4,105,401

)

Total stockholders’ deficit

 

 

(1,012,041

)

 

 

(725,617

)

Total liabilities and stockholders’ deficit

 

$

2,277,496

 

 

$

2,315,590

 


NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)







 

 

 

Three Months Ended
January 31,

 

Six Months Ended
January 31,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands, except per share data)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

174,798

 

 

$

209,151

 

 

$

330,550

 

 

$

389,256

 

Support, entitlements and other services

 

 

171,584

 

 

 

203,930

 

 

 

328,586

 

 

 

402,342

 

Total revenue

 

 

346,382

 

 

 

413,081

 

 

 

659,136

 

 

 

791,598

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product (1)(2)

 

 

13,784

 

 

 

15,096

 

 

 

26,598

 

 

 

29,317

 

Support, entitlements and other services (1)

 

 

57,170

 

 

 

64,873

 

 

 

112,315

 

 

 

132,098

 

Total cost of revenue

 

 

70,954

 

 

 

79,969

 

 

 

138,913

 

 

 

161,415

 

Gross profit

 

 

275,428

 

 

 

333,112

 

 

 

520,223

 

 

 

630,183

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing (1)(2)

 

 

261,071

 

 

 

241,633

 

 

 

518,361

 

 

 

491,666

 

Research and development (1)

 

 

135,571

 

 

 

141,608

 

 

 

271,375

 

 

 

285,874

 

General and administrative (1)

 

 

35,034

 

 

 

44,291

 

 

 

68,808

 

 

 

84,319

 

Total operating expenses

 

 

431,676

 

 

 

427,532

 

 

 

858,544

 

 

 

861,859

 

Loss from operations

 

 

(156,248

)

 

 

(94,420

)

 

 

(338,321

)

 

 

(231,676

)

Other expense, net

 

 

(126,001

)

 

 

(15,332

)

 

 

(204,733

)

 

 

(293,881

)

Loss before provision for income taxes

 

 

(282,249

)

 

 

(109,752

)

 

 

(543,054

)

 

 

(525,557

)

Provision for income taxes

 

 

5,141

 

 

 

5,309

 

 

 

9,384

 

 

 

9,356

 

Net loss

 

$

(287,390

)

 

$

(115,061

)

 

$

(552,438

)

 

$

(534,913

)

Net loss per share attributable to Class A and Class B common stockholders—basic and diluted (3)

 

$

(1.42

)

 

$

(0.53

)

 

$

(2.72

)

 

$

(2.46

)

Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders—basic and diluted (3)

 

 

202,520

 

 

 

218,808

 

 

 

202,798

 

 

 

217,153

 

_______________________

(1)


Includes the following stock-based compensation expense:

 

 

Three Months Ended
January 31,

 

Six Months Ended
January 31,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

 

Product cost of revenue

 

$

1,659

 

 

$

1,948

 

 

$

3,163

 

 

$

3,699

 

Support, entitlements and other services cost of revenue

 

 

5,764

 

 

 

7,806

 

 

 

11,525

 

 

 

16,257

 

Sales and marketing

 

 

30,031

 

 

 

26,380

 

 

 

62,258

 

 

 

55,512

 

Research and development

 

 

36,058

 

 

 

35,763

 

 

 

73,945

 

 

 

74,242

 

General and administrative

 

 

10,942

 

 

 

16,148

 

 

 

22,761

 

 

 

28,882

 

Total stock-based compensation expense

 

$

84,454

 

 

$

88,045

 

 

$

173,652

 

 

$

178,592

 

(2)


Includes the following amortization of intangible assets:

 

 

Three Months Ended
January 31,

 

 

Six Months Ended
January 31,

 

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

 

Product cost of revenue

 

$

3,694

 

 

$

3,368

 

 

$

7,388

 

 

$

6,844

 

Sales and marketing

 

 

651

 

 

 

651

 

 

 

1,302

 

 

 

1,302

 

Total amortization of intangible assets

 

$

4,345

 

 

$

4,019

 

 

$

8,690

 

 

$

8,146

 

(3)


Effective January 3, 2022, all of the then outstanding shares of Nutanix, Inc. Class B common stock were automatically converted into the same number of shares of Nutanix, Inc. Class A common stock.


NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




 

 

 

Six Months Ended
January 31,

 

 

2021

 

2022

 

 

(in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(552,438

)

 

$

(534,913

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

47,087

 

 

 

45,582

 

Stock-based compensation

 

 

173,652

 

 

 

178,592

 

Change in fair value of derivative liability

 

 

166,380

 

 

 

198,038

 

Loss on debt extinguishment

 

 

 

 

 

64,910

 

Amortization of debt discount and issuance costs

 

 

28,796

 

 

 

19,796

 

Operating lease cost, net of accretion

 

 

16,930

 

 

 

18,336

 

Impairment of lease-related assets

 

 

2,822

 

 

 

 

Non-cash interest expense

 

 

6,615

 

 

 

9,575

 

Other

 

 

4,354

 

 

 

5,156

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

79,173

 

 

 

23,826

 

Deferred commissions

 

 

(67,677

)

 

 

(13,332

)

Prepaid expenses and other assets

 

 

(9,217

)

 

 

(4,951

)

Accounts payable

 

 

(2,602

)

 

 

(2,391

)

Accrued compensation and benefits

 

 

39,593

 

 

 

(19,496

)

Accrued expenses and other liabilities

 

 

2,100

 

 

 

(3,371

)

Operating leases, net

 

 

(16,523

)

 

 

(23,619

)

Deferred revenue

 

 

61,325

 

 

 

70,968

 

Net cash (used in) provided by operating activities

 

 

(19,630

)

 

 

32,706

 

Cash flows from investing activities:

 

 

 

 

 

 

Maturities of investments

 

 

260,852

 

 

 

568,697

 

Purchases of investments

 

 

(859,576

)

 

 

(556,148

)

Sales of investments

 

 

2,999

 

 

 

17,999

 

Purchases of property and equipment

 

 

(25,168

)

 

 

(17,390

)

Net cash (used in) provided by investing activities

 

 

(620,893

)

 

 

13,158

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from sales of shares through employee equity incentive plans

 

 

21,904

 

 

 

32,053

 

Payments of debt extinguishment costs

 

 

 

 

 

(14,709

)

Proceeds from unwinding of convertible note hedges

 

 

 

 

 

39,880

 

Payments for unwinding of warrants

 

 

 

 

 

(18,390

)

Proceeds from the issuance of convertible notes, net of issuance costs

 

 

723,617

 

 

 

89,128

 

Repurchases of common stock

 

 

(125,079

)

 

 

(58,570

)

Payment of finance lease obligations

 

 

 

 

 

(323

)

Net cash provided by financing activities

 

 

620,442

 

 

 

69,069

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

$

(20,080

)

 

$

114,933

 

Cash, cash equivalents and restricted cash—beginning of period

 

 

321,991

 

 

 

288,873

 

Cash, cash equivalents and restricted cash—end of period

 

$

301,911

 

 

$

403,806

 

Restricted cash (1)

 

 

3,210

 

 

 

3,057

 

Cash and cash equivalents—end of period

 

$

298,701

 

 

$

400,749

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid for income taxes

 

$

8,999

 

 

$

12,084

 

Supplemental disclosures of non-cash investing and
financing information:

 

 

 

 

 

 

Purchases of property and equipment included in accounts payable and accrued and other liabilities

 

$

7,621

 

 

$

18,939

 

Finance lease liabilities arising from obtaining right-of-use assets

 

$

1,960

 

 

$

11,148

 

Convertible senior notes offering costs included in accrued liabilities

 

$

 

 

$

693

 

_______________________

(1)


Included within other assets—non-current in the condensed consolidated balance sheets.


Reconciliation of Revenue to Billings

(Unaudited)







 

 

 

Three Months Ended
January 31,

 

Six Months Ended
January 31,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

Total revenue

 

$

346,382

 

 

$

413,081

 

 

$

659,136

 

 

$

791,598

 

Change in deferred revenue

 

 

39,131

 

 

 

51,460

 

 

 

61,325

 

 

 

70,968

 

Total billings

 

$

385,513

 

 

$

464,541

 

 

$

720,461

 

 

$

862,566

 

Disaggregation of Revenue and Billings

(Unaudited)







 

 

 

Three Months Ended
January 31,

 

Six Months Ended
January 31,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

 

Disaggregation of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription revenue

 

$

305,946

 

 

$

374,744

 

 

$

584,111

 

 

$

712,645

 

Non-portable software revenue

 

 

21,661

 

 

 

14,542

 

 

 

41,704

 

 

 

28,879

 

Hardware revenue

 

 

1,321

 

 

 

1,753

 

 

 

2,050

 

 

 

3,916

 

Professional services revenue

 

 

17,454

 

 

 

22,042

 

 

 

31,271

 

 

 

46,158

 

Total revenue

 

$

346,382

 

 

$

413,081

 

 

$

659,136

 

 

$

791,598

 

Disaggregation of billings:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription billings

 

$

339,168

 

 

$

427,404

 

 

$

633,091

 

 

$

786,727

 

Non-portable software billings

 

 

21,661

 

 

 

14,542

 

 

 

41,704

 

 

 

28,879

 

Hardware billings

 

 

1,321

 

 

 

1,753

 

 

 

2,050

 

 

 

3,916

 

Professional services billings

 

 

23,363

 

 

 

20,842

 

 

 

43,616

 

 

 

43,044

 

Total billings

 

$

385,513

 

 

$

464,541

 

 

$

720,461

 

 

$

862,566

 

Subscription — Subscription revenue includes any performance obligation which has a defined term, and is generated from the sales of software entitlement and support subscriptions, subscription software licenses and cloud-based Software as a Service, or SaaS offerings.

  • Ratable We recognize revenue from software entitlement and support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlement and support subscriptions.
  • Upfront Revenue from our subscription software licenses is generally recognized upfront upon transfer of control to the customer, which happens when we make the software available to the customer.

Non-portable software — Non-portable software revenue includes sales of our enterprise cloud platform when delivered on a configured-to-order appliance by us or one of our OEM partners. The software licenses associated with these sales are typically non-portable and have a term equal to the life of the appliance on which the software is delivered. Revenue from our non-portable software products is generally recognized upon transfer of control to the customer.

Hardware — In transactions where we deliver the hardware appliance, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis. We consider the amount allocated to hardware revenue to be equivalent to the cost of the hardware procured. Hardware revenue is generally recognized upon transfer of control to the customer.

Professional services — We also sell professional services with our products. We recognize revenue related to professional services as they are performed.


Annual Contract Value Billings, Annual Recurring Revenue and Run-rate Annual Contract Value

(Unaudited)







 

 

 

Three Months Ended
January 31,

 

Six Months Ended
January 31,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

 

Annual Contract Value Billings (ACV Billings)

 

$

159,208

 

 

$

217,850

 

 

$

285,956

 

 

$

390,487

 

Annual Recurring Revenue (ARR)

 

$

672,822

 

 

$

1,042,194

 

 

$

672,822

 

 

$

1,042,194

 

Run-rate Annual Contract Value (Run-rate ACV)

 

$

1,384,823

 

 

$

1,682,004

 

 

$

1,384,823

 

 

$

1,682,004

 

Reconciliation of Subscription and Professional Services Revenue to Subscription and Professional Services Billings

(Unaudited)







 

 

 

Three Months Ended
January 31,

 

Six Months Ended
January 31,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

 

Subscription revenue

 

$

305,946

 

 

$

374,744

 

 

$

584,111

 

 

$

712,645

 

Change in subscription deferred revenue

 

 

33,222

 

 

 

52,660

 

 

 

48,980

 

 

 

74,082

 

Subscription billings

 

$

339,168

 

 

$

427,404

 

 

$

633,091

 

 

$

786,727

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional services revenue

 

$

17,454

 

 

$

22,042

 

 

$

31,271

 

 

$

46,158

 

Change in professional services deferred revenue

 

 

5,909

 

 

 

(1,200

)

 

 

12,345

 

 

 

(3,114

)

Professional services billings

 

$

23,363

 

 

$

20,842

 

 

$

43,616

 

 

$

43,044

 


Reconciliation of GAAP to Non-GAAP Profit Measures

(Unaudited)










 

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Three Months Ended January 31, 2022

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

Three Months Ended January 31, 2022

 

 

(in thousands, except percentages and per share data)

 

Gross profit

 

$

333,112

 

 

$

9,754

 

 

$

3,368

 

 

$

 

 

$

 

 

$

 

 

$

346,234

 

Gross margin

 

 

80.6

%

 

 

2.4

%

 

 

0.8

%

 

 

 

 

 

 

 

 

 

 

 

83.8

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

241,633

 

 

 

(26,380

)

 

 

(651

)

 

 

 

 

 

 

 

 

 

 

 

214,602

 

Research and development

 

 

141,608

 

 

 

(35,763

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

105,845

 

General and administrative

 

 

44,291

 

 

 

(16,148

)

 

 

 

 

 

(1,305

)

 

 

 

 

 

 

 

 

26,838

 

Total operating expenses

 

 

427,532

 

 

 

(78,291

)

 

 

(651

)

 

 

(1,305

)

 

 

 

 

 

 

 

 

347,285

 

Loss from operations

 

 

(94,420

)

 

 

88,045

 

 

 

4,019

 

 

 

1,305

 

 

 

 

 

 

 

 

 

(1,051

)

Net loss

 

$

(115,061

)

 

$

88,045

 

 

$

4,019

 

 

$

1,305

 

 

$

15,126

 

 

$

432

 

 

$

(6,134

)

Weighted shares outstanding, basic and diluted

 

 

218,808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

218,808

 

Net loss per share, basic and diluted

 

$

(0.53

)

 

$

0.40

 

 

$

0.02

 

 

$

0.01

 

 

$

0.07

 

 

$

-

 

 

$

(0.03

)

_______________________

(1)


Stock-based compensation expense

(2)


Amortization of intangible assets

(3)


Other

(4)


Amortization of debt discount and issuance costs and interest expense related to convertible senior notes

(5)


Income tax effect primarily related to stock-based compensation expense


 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Six Months Ended January 31, 2022

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

(7)

 

Six Months Ended January 31, 2022

 

 

(in thousands, except percentages and per share data)

 

Gross profit

 

$

630,183

 

 

$

19,956

 

 

$

6,844

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

656,983

 

Gross margin

 

 

79.6

%

 

 

2.5

%

 

 

0.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

83.0

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

491,666

 

 

 

(55,512

)

 

 

(1,302

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

434,852

 

Research and development

 

 

285,874

 

 

 

(74,242

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

211,632

 

General and administrative

 

 

84,319

 

 

 

(28,882

)

 

 

 

 

 

(2,010

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

53,427

 

Total operating expenses

 

 

861,859

 

 

 

(158,636

)

 

 

(1,302

)

 

 

(2,010

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

699,911

 

Loss from operations

 

 

(231,676

)

 

 

178,592

 

 

 

8,146

 

 

 

2,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(42,928

)

Net loss

 

$

(534,913

)

 

$

178,592

 

 

$

8,146

 

 

$

2,010

 

 

$

198,038

 

 

$

29,882

 

 

$

64,911

 

 

$

693

 

 

$

(52,641

)

Weighted shares outstanding, basic and diluted

 

 

217,153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

217,153

 

Net loss per share, basic and diluted

 

$

(2.46

)

 

$

0.82

 

 

$

0.04

 

 

$

0.01

 

 

$

0.91

 

 

$

0.14

 

 

$

0.30

 

 

$

-

 

 

$

(0.24

)

_______________________

(1)


Stock-based compensation expense

(2)


Amortization of intangible assets

(3)


Other

(4)


Change in fair value of derivative liability

(5)


Amortization of debt discount and issuance costs and interest expense related to convertible senior notes

(6)


Loss on debt extinguishment

(7)


Income tax effect primarily related to stock-based compensation expense


 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Three Months Ended January 31, 2021

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

Three Months Ended January 31, 2021

 

 

(in thousands, except percentages and per share data)

 

Gross profit

 

$

275,428

 

 

$

7,423

 

 

$

3,694

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

286,545

 

Gross margin

 

 

79.5

%

 

 

2.1

%

 

 

1.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

82.7

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

261,071

 

 

 

(30,031

)

 

 

(651

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

230,389

 

Research and development

 

 

135,571

 

 

 

(36,058

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

99,513

 

General and administrative

 

 

35,034

 

 

 

(10,942

)

 

 

 

 

 

(467

)

 

 

 

 

 

 

 

 

 

 

 

23,625

 

Total operating expenses

 

 

431,676

 

 

 

(77,031

)

 

 

(651

)

 

 

(467

)

 

 

 

 

 

 

 

 

 

 

 

353,527

 

Loss from operations

 

 

(156,248

)

 

 

84,454

 

 

 

4,345

 

 

 

467

 

 

 

 

 

 

 

 

 

 

 

 

(66,982

)

Net loss

 

$

(287,390

)

 

$

84,454

 

 

$

4,345

 

 

$

467

 

 

$

101,640

 

 

$

21,751

 

 

$

609

 

 

$

(74,124

)

Weighted shares outstanding, basic and diluted

 

 

202,520

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

202,520

 

Net loss per share, basic and diluted

 

$

(1.42

)

 

$

0.42

 

 

$

0.02

 

 

$

-

 

 

$

0.50

 

 

$

0.11

 

 

$

-

 

 

$

(0.37

)

_______________________

(1)


Stock-based compensation expense

(2)


Amortization of intangible assets

(3)


Other

(4)


Change in fair value of derivative liability

(5)


Amortization of debt discount and issuance costs and non-cash interest expense

(6)


Income tax effect primarily related to stock-based compensation expense


 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Six Months Ended January 31, 2021

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

(7)

 

Six Months Ended January 31, 2021

 

 

(in thousands, except share and per share data)

 

Gross profit

 

$

520,223

 

 

$

14,688

 

 

$

7,388

 

 

$

287

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

542,586

 

Gross margin

 

 

78.9

%

 

 

2.2

%

 

 

1.1

%

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

82.3

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

518,361

 

 

 

(62,258

)

 

 

(1,302

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

454,801

 

Research and development

 

 

271,375

 

 

 

(73,945

)

 

 

 

 

 

(2,535

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

194,895

 

General and administrative

 

 

68,808

 

 

 

(22,761

)

 

 

 

 

 

 

 

 

(973

)

 

 

 

 

 

 

 

 

 

 

 

45,074

 

Total operating expenses

 

 

858,544

 

 

 

(158,964

)

 

 

(1,302

)

 

 

(2,535

)

 

 

(973

)

 

 

 

 

 

 

 

 

 

 

 

694,770

 

Loss from operations

 

 

(338,321

)

 

 

173,652

 

 

 

8,690

 

 

 

2,822

 

 

 

973

 

 

 

 

 

 

 

 

 

 

 

 

(152,184

)

Net loss

 

$

(552,438

)

 

$

173,652

 

 

$

8,690

 

 

$

2,822

 

 

$

973

 

 

$

166,380

 

 

$

35,411

 

 

$

1,002

 

 

$

(163,508

)

Weighted shares outstanding, basic and diluted

 

 

202,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

202,798

 

Net loss per share, basic and diluted

 

$

(2.72

)

 

$

0.86

 

 

$

0.04

 

 

$

0.01

 

 

$

-

 

 

$

0.82

 

 

$

0.18

 

 

$

-

 

 

$

(0.81

)

_______________________

(1)


Stock-based compensation expense

(2)


Amortization of intangible assets

(3)


Impairment of lease-related assets

(4)


Other

(5)


Change in fair value of derivative liability

(6)


Amortization of debt discount and issuance costs

(7)


Income tax effect primarily related to stock-based compensation expense


Reconciliation of GAAP Net Cash (Used in) Provided by Operating Activities to Non-GAAP Free Cash Flow

(Unaudited)







 

 

 

Three Months Ended
January 31,

 

Six Months Ended
January 31,

 

 

2021

 

2022

 

2021

 

2022

 

 

(in thousands)

 

Net cash (used in) provided by operating activities

 

$

(15,557

)

 

$

25,767

 

 

$

(19,630

)

 

$

32,706

 

Purchases of property and equipment

 

 

(12,916

)

 

 

(8,546

)

 

 

(25,168

)

 

 

(17,390

)

Free cash flow

 

$

(28,473

)

 

$

17,221

 

 

$

(44,798

)

 

$

15,316

 

 

Contacts

Investor Contact:
Richard Valera
ir@nutanix.com

Media Contact:
Jennifer Massaro
pr@nutanix.com


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Ticker: NTNX
CIK: 1618732
Form Type: 8-K Corporate News
Accession Number: 0001157523-22-000279
Submitted to the SEC: Wed Mar 02 2022 4:05:37 PM EST
Accepted by the SEC: Wed Mar 02 2022
Period: Wednesday, March 2, 2022
Industry: Prepackaged Software
Events:
  1. Earnings Release
  2. Financial Exhibit

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