Billion-Dollar Unicorns: Nutanix Focuses On Software
@Nutanix has introduced new innovative products for multi-cloud environments. With Nutanix’s shift in business model to software, we might see further consolidation of smaller players. Its stock is currently trading at $53.75 with a market capitalization of $8.97 billion. According to IDC, sales from hyperconverged systems, which collapse core storage and compute functionality into a single, highly virtualized solution, grew 64.3% to $3.7 billion in 2017, accounting for 34% of the total converged systems market. San Jose-based hyperconverged storage provider Nutanix (NASDAQ:NTNX), which went public in 2016, is at second place in the hyperconverged systems market. Nutanix’s Financials For the third quarter, Nutanix reported revenues of $289.4 million, up 41%. GAAP net loss narrowed to $85.7 million from a loss of $96.8 million in Q317. Non-GAAP net loss was $34.6 million, or $0.21 per share. Analysts were looking for a loss of $0.19 on revenue of $279 million. By segment, support revenue was up 50% to $68.3 million. Product revenue was up 38% to $221.1 million with software revenue growing 57% to $158.5 million and hardware revenue growing 5% to $62.6 million. Advertisement ￼ Nutanix added 820 new end-customers during the quarter, taking its total end-customers count to 9,690. Deals greater than $1 million grew by 28%. Nutanix has been transitioning to a software-defined business model. It grew software and support billings by 67%, including three software and support deals worth more than $5 million each. Pass-through hardware billings decreased to 17% of total billings in the quarter, down from 25% a year ago. Q3 GAAP gross margin was 67%, up from 59.5% a year ago. Cash and short-term investments were up 164% to $923.5 million.