The Big Question Nutanix Must Answer
Nutanix (NASDAQ: NTNX), the maker of cloud-based hyperconverged infrastructure software, delivered another solid earnings report last Monday.
Billings, measured on an annual contract value (ACV) basis, rose 10% to $137.8 million, outpacing the company's guidance. Its ACV run rate rose 29% to $1.29 billion, showing momentum in the company's key metrics. However, revenue in the quarter was flat. Nutanix is shifting from a focus on total contract value (TCV) to annual contract value, causing revenue growth to decelerate, since the company typically isn't booking as long of a contract up front. Shifting to a focus on ACV rather than TCV means the company can be more efficient with its sales force, as contract renewals tend to have a lower sales cost than new customer contracts. Focusing on ACV should also drive faster new product adoption.
Revenue slipped 0.4% to $312.8 million, beating the average analyst estimate of $299.2 million. Furthermore, the company saved on sales expenses due to the pandemic, as its .NEXT conference went virtual and it shifted marketing resources to digital channels. As a result, its adjusted loss per share narrowed from $0.71 to $0.44. This topped the analyst consensus, which called for a per-share loss of $0.57.
Source Fool.com
