Nutanix, a technology company, reported strong third-quarter earnings that exceeded Wall Street’s expectations. The company’s earnings per share (EPS) was $0.28, higher than the anticipated $0.17. Revenue for the quarter also outperformed, coming in at $524.6 million compared to the estimated $515.96 million.
However, Nutanix issued weaker guidance for the fourth quarter, projecting revenue between $530 million and $540 million, falling short of analysts’ consensus of $548.1 million. For the full fiscal year 2024, the company expects revenue to range from $2.13 billion to $2.14 billion, slightly below the estimated $2.141 billion.
President and CEO Rajiv Ramaswami credited the company’s strong third-quarter performance to “disciplined execution and the strength of our business model.” He highlighted recent initiatives in modern applications and generative AI, along with expanded partnerships, as driving factors behind the Nutanix Cloud Platform’s value proposition.
CFO Rukmini Sivaraman emphasized Nutanix’s balanced top and bottom-line performance, highlighting a 24% increase in annual recurring revenue (ARR) year-over-year and robust free cash flow generation.
Despite the soft guidance, analysts at KeyBanc Capital Markets maintained their positive stance on Nutanix, reiterating an Overweight rating. The firm pointed out that Nutanix’s annual contract value (ACV) deals are increasing in size and strategic significance. Clients are leveraging Nutanix’s positioning to benefit from hybrid cloud, disaster recovery, and AI trends with expanding catalysts.
In conclusion, while Nutanix delivered strong third-quarter results, the weaker guidance for the fourth quarter caused a downward shift in the company’s stock price, with shares tumbling more than 11% in premarket trading. The company remains focused on sustainable, profitable growth and continues to innovate in modern applications and generative AI to drive value for its customers.
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