Nutanix CEO Rajiv Ramaswami updated investors on the company’s performance and highlighted the challenges posed by larger deals that require strategic decisions and C-suite approvals. The shift in VMware customers due to Broadcom’s price changes is leading to more discussions about switching, but the complexity of these deals is making short-term revenue predictions difficult. The company has seen growth in deals over $1 million in annual contract value, with a recent significant win being an eight-figure deal with a Fortune 50 financial services company that took two years to close.
CFO Rukmini Sivaraman noted that such lengthy deal cycles will likely be the new normal for Nutanix, as the contracts are larger but take longer to close and monetize. The company’s revenue for the quarter was $525 million, up 17 percent year over year, exceeding previous guidance. They anticipate annual revenue to reach around $2.14 billion, a 15 percent growth compared to the previous year. Net income was $85 million, with additional shares repurchased as part of a buyback program authorized by the board.
Nutanix is collaborating with Dell Technologies to create a hyperconverged infrastructure solution using Dell PowerEdge servers. This partnership aims to provide customers with the choice to procure the Nutanix platform directly from Dell and offer a platform powered by AHV hypervisor for compute and Dell PowerFlex for storage. The ability to use Nutanix on Dell infrastructure allows customers to reuse existing IP-based Dell 3-tier storage hardware, extending the life of their investments.
The company’s stock declined by 23 percent following the earnings call and update to investors. Despite the challenges posed by larger and more complex deals, Nutanix remains focused on growth and innovation through strategic partnerships to provide value to their customers and drive future success in the market.
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https://www.crn.com/news/virtualization/2024/nutanix-says-growth-hangs-on-bigger-deals-taking-longer-to-close
