Nutanix Inc. and its Chief Executive Rajiv Ramaswami are facing a stock drop of more than 20% after a disappointing outlook in yesterday’s earnings call. Ramaswami remains optimistic, stating that the sales slowdown is temporary and that large contracts in negotiation will boost the company’s fortunes soon.
Despite this setback, Nutanix reported positive news during its third-quarter earnings announcement. This includes a 24% growth in annual recurring revenue, a 17% growth in quarterly revenue to $524.6 million, and a 20% increase in annual contract value billings to $288.9 million. Ramaswami emphasized that Wall Street’s negative reaction overlooked these achievements.
Ramaswami attributed the sales slowdown to elongated closing cycles for new deals, with competition from Broadcom Inc. and its VMware subsidiary impacting business. He noted that Nutanix is aggressively pursuing VMware defectors with free migration services, channel network investments, and expanded OEM partnerships.
Partnerships with Cisco Systems Inc. and Dell Technologies Inc. selling Nutanix’s hybrid cloud software on their infrastructure demonstrate the company’s momentum. However, customers are being cautious about their purchasing decisions, with signature and approval levels going up to CFO or CEO levels.
Ramaswami highlighted long-term trends favoring Nutanix, such as the adoption of software containers and Kubernetes orchestrator for new applications across hybrid infrastructure. He also mentioned the hybrid AI adoption trend, stating that AI workloads will go where the data is and that latency limitations in the public cloud will result in local AI model deployments.
Despite the current challenges, Ramaswami remains hopeful that Nutanix will benefit from these industry trends in the long run. Joining Nutanix in confronting these challenges are more than 15,000 #CubeAlumni experts, including industry leaders like Amazon.com CEO Andy Jassy and Dell Technologies founder Michael Dell.
In conclusion, while Nutanix is currently facing sales slowdown and competitive pressures, the company remains optimistic about its future prospects. By leveraging industry trends and strategic partnerships, Nutanix aims to overcome the current challenges and emerge stronger in the near term.
Article Source
https://siliconangle.com/2024/05/30/nutanix-ceo-sees-sales-slowdown-temporary/
