Nutanix Plummets 24% On Q2 Earnings Miss, Q3 Guidance Downgrade

The shares of Nutanix NTNX plummeted in the after-hours session on Wednesday as the company reported substantial losses in the second quarter of the financial year 2020.

What Happened

Nutanix, a cloud computing company, reported loss per share of $1.13, up 66% from the loss of 68 cents per share posted in the similar quarter last year.

The non-GAAP loss per share stood at 60 cents, up 161% YoY.

The company reported a rise of 3.3% in total revenue YoY at $346.8 million compared to last year's $335.4 million.

"We saw strong momentum in the shift of our business towards subscription," Nutanix chief financial officer Duston Williams said in a statement.

"In the second quarter, 79% of billings came from subscription, surpassing our stated goal of 75% by the end of the fiscal year and well ahead of our internal plan, while still delivering on our guidance for top line growth."

The company also downgraded its earlier earnings guidance for the next quarter. It said it expects the shift to a subscription model and the impact of the coronavirus (COVID-19) in the Asia Pacific region to take a toll on its business.

Nutanix expects a non-GAAP loss per share of 89 cents for the third quarter and operating expenses between $420 million and $430 million. For the entire financial year 2020, the company gave a guidance of non-GAAP operating expenses between $1.63 billion and $1.65 billion.

Price Action

Nutanix shares slumped nearly 18% in the after-hours session on Wednesday. The shares closed the regular-session 6% lower at $32.63.