Today's surge in Nutanix's stock price.
Today's surge in Nutanix's stock price.
Nutanix's (NTNX 2.29%) shares saw a surge of up to 9.2% early Thursday, eventually settling at an increase of 3.5% by 2:30 p.m. ET. This uptick followed the cloud-computing and hyperconverged-infrastructure (HCI) company's announcement of impressive quarterly results.
In its fiscal first quarter of 2024 (ending Oct. 31, 2023), Nutanix's revenue increased by 18% year-on-year, reaching $511.1 million. This translated into an adjusted (non-GAAP) net income of $85 million, equating to $0.29 per share. Analysts had forecasted earnings of $0.17 per share on revenue of $500 million.
Addressing Nutanix's outperformance amidst economic challenges
Nutanix CEO Rajiv Ramaswami commented, "We posted a robust first-quarter financial performance against a rather uncertain macroeconomic terrain, reflecting the value our customers derive from the Nutanix Cloud Platform and the strength of our subscription-based business model."
During the quarter, Nutanix's annual contract value (ACV) billings surged by 24% year-on-year to $278.2 million. Meanwhile, annual recurring revenue (ARR) expanded by 30% to reach $1.66 billion at the quarter's end. Although average contract duration contracted moderately to 2.9 years from 3 years during the same period the previous year.
Furthermore, Nutanix's quarterly free cash flow nearly tripled compared to the same period the previous year, amounting to $132.5 million.
What's next for Nutanix investors?
Nutanix also released its fiscal second-quarter 2024 guidance, which forecasts revenue between $545 million and $555 million. This is considerably higher than analysts' expectations of roughly $534 million in fiscal Q2 revenue.
Lastly, Nutanix opted to raise its full fiscal-year outlook to $2.095 billion to $2.125 billion, surpassing its previous range of $2.085 billion to $2.115 billion and exceeding analysts' predictions of $2.09 billion.
In summary, as Nutanix transitions to a recurring subscription-based revenue model, this quarter showcased outstanding performance, underscored by resilience amidst trying macroeconomic conditions. Although shares trade near their 52-week high today, I believe they have ample potential to escalate further.
Given Nutanix's impressive financial performance, investors may want to consider allocating more funds towards this company in their investment portfolio. With the strong quarterly results, an increase in annual contract value and annual recurring revenue, and a raised full fiscal-year outlook, Nutanix seems to be a promising choice for finance-conscious investors looking to invest in the cloud-computing sector.