Why Nutanix Shares Are Plummeting After Hours

Nutanix Inc NTNX reported third-quarter revenue growth of 17.2% year-over-year to $403.66 million, beating the consensus of $397.87 million. Adjusted EPS was $(0.05), above the consensus of $(0.22).

The gross margin expanded by 185 bps to 80.2%. Adjusted gross margin expanded by 160 bps to 83.3%.

ACV billings increased 28% Y/Y to $204.7 million, ARR was up 46% Y/Y to $1 billion, and the average contract term fell to 3.2 years from 3.3 years.

Adjusted operating expenses reduced by 5% Y/Y to $341.7 million. Loss from operations reduced to $(92.35) million, from $(180.57) million in 3Q21.

Nutanix generated cash from operating activities year-to-date of $29.54 million, compared to cash used of $(75.18) million a year ago. Free cash outflow was $4.74 million.

“Late in the third quarter, we saw an unexpected impact from challenges that limited our upside in the quarter and affected our outlook for the fourth quarter. Increased supply chain delays with our hardware partners account for the significant majority of the impact to our outlook, and higher-than-expected sales rep attrition in the third quarter was also a factor,” commented Rajiv Ramaswami, President, and CEO.

4Q22 Outlook: Nutanix expects ACV billings of $175 million - $185 million and Revenue of $340 million - $360 million, vs. a consensus of $439 million. It expects an adjusted Gross Margin of ~79% to 80% and an adjusted Operating Expense of $360 million - $365 million.

FY22 Outlook: The company expects ACV billings of $735 million - $745 million and Revenue of $1.535 billion - $1.555 billion, vs. a consensus of $1.63 billion. It expects an adjusted Gross Margin of ~82% and an adjusted Operating Expense of $1.4 billion - $1.407 billion.

Price Action: NTNX shares are trading lower by 24.40% at $16.20 during the post-market session on Wednesday.

Photo via Company

Posted In: why it's movingEarningsNewsGuidanceMoversTrading Ideas

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.