Shares of Nutanix (NASDAQ: NTNX) surged by 27% after the enterprise hybrid cloud provider reported better-than-expected fiscal fourth-quarter earnings. The company posted revenue of $299.9 million, beating analysts’ estimates of $294 million. Adjusted net loss was $105.8 million, or $0.57 per share, compared to consensus expectations of $0.64 per share in adjusted losses. The company’s transition to a subscription model helped expand adjusted gross margin to a record 80%.
Billings for the quarter were $371.7 million, with deferred revenue reaching $910 million. Subscription billings made up 71% of total billings, while subscription revenue represented 65% of total sales. CEO Dheeraj Pandey attributed the solid fourth-quarter performance to execution improvements and the progress in transitioning to a subscription model.
For the first quarter of fiscal 2020, Nutanix expects software and support revenue of $290 million to $300 million, with software and support billings projected to be $360 million to $370 million. Hardware is anticipated to make up 3% or less of total billings, and adjusted gross margin is forecasted to be around 80%. The company guided for an adjusted net loss of $0.75 per share.
Overall, Nutanix’s strong earnings report and optimistic outlook for the upcoming quarter have fueled the stock’s significant gain today. CEO Pandey expressed confidence in the company’s performance and the progress it has made in transitioning to a subscription model. Analysts and investors are likely pleased with the company’s record gross margins and other positive developments. Nutanix continues to focus on growth and expansion in the enterprise hybrid cloud market, with the subscription model playing a key role in driving revenue and profitability.
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