Nutanix (NASDAQ:) reported third-quarter earnings that beat Wall Street expectations but gave weaker-than-expected fourth-quarter guidance, sending its shares plunging more than 11% in premarket trading on Thursday.
The company’s third-quarter earnings per share (EPS) came in at $0.28, $0.11 higher than analyst estimates of $0.17. Revenue for the quarter was also strong at $524.6 million, surpassing the consensus estimate of $515.96 million.
Nutanix expects revenue to be between $530 million and $540 million, below the analyst 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 consensus estimate of $2.141 billion.
President and CEO Rajiv Ramaswami attributed the solid third-quarter results to “disciplined execution and the strength of our business model.”
He highlighted recent initiatives in modern applications and generative AI, as well as expanded partnerships, as key drivers of the Nutanix Cloud Platform value proposition.
CFO Rukmini Sivaraman highlighted the company’s balance between top and bottom-line performance, pointing to a 24% increase in annual recurring revenue (ARR) year-on-year and robust free cash flow generation since the beginning of the year.
“We remain focused on delivering sustainable, profitable growth,” Sivaraman added.
Despite soft guidance, KeyBanc Capital Markets analysts reiterated their Overweight rating on NTNX. The company noted that Nutanix’s annual contract value (ACV) deals are increasing in size and strategic significance, “with customers benefiting from Nutanix’s positioning to take advantage of hybrid cloud, disaster recovery and AI trends with growing catalysts.” “
