Nutanix reported strong financial results for the third quarter of fiscal 2024, with revenue reaching $524.6 million, a 17 percent increase year-on-year. The company also saw growth in customer count, with 490 new customers added in the quarter, bringing the total to 25,860. Average Contract Value (ACV) billings were up 20 percent to $288.9 million, and annual recurring revenue (ARR) grew 24 percent to $1.8 billion.
Gross margin improved to 84.8% from 81.6% the previous year, and free cash flow increased to $78.3 million. Nutanix signed a deal with Dell to capture unhappy VMware customers, allowing them to run Nutanix’ AHV hypervisor on existing Dell servers. This move aims to help customers transition to Nutanix faster without waiting for hardware depreciation cycles to end.
President and CEO Rajiv Ramaswami highlighted the company’s solid performance and disciplined execution, with CFO Rukmini Sivaraman emphasizing the focus on delivering sustainable, profitable growth. Nutanix is focused on expanding its customer base and increasing the dollar amount of pipeline deals with ACV billings greater than $1 million.
Analyst Jason Ader noted that the top-line growth was driven by large wins with the Nutanix Cloud Platform (NCP) and steady infrastructure modernization demand. Nutanix is looking to leverage the opportunity created by Broadcom’s acquisition of VMware by offering easier migration options for VMware customers.
The company’s outlook for the final quarter of fiscal 2024 is positive, with expected revenue of $535 million. There is anticipation of a potential impact from larger deals in the pipeline, but management sees opportunities for growth through new partnerships and ongoing initiatives.
Overall, Nutanix continues to show resilience and innovation in the competitive tech landscape, aiming to provide value to customers and adapt to changing market dynamics. Management is optimistic about future growth prospects and is focused on delivering sustainable results in the coming quarters.
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https://blocksandfiles.com/2024/06/03/nutanix-solid-revenue-rise-with-dell-deal-to-aid-vmware-migration/
