1 Reason Why Nutanix Looks Like a Buy After Its Latest Earnings Report
Nutanix (NASDAQ: NTNX) is back on track.
For the second quarter in a row, the stock was flying higher on the strength of an earnings report as the company's transition to a subscription-based Software-as-a-Service (SaaS) business appears to be gaining traction. In just two years the tech company has gone from selling hardware to selling software, and now cloud-based software, through a subscription model.
The company, which focuses on cloud-based infrastructure and hyper-convergence (the combination of storage, computing, and networking), beat estimates and its own guidance on both the top and bottom lines. Overall revenue in the fiscal first quarter rose 0.5% to $314.8 million, a reflection of the move away from hardware and traditional software revenue, which comes in one lump sum. However, that was well ahead of the analyst consensus at $306.4 million. Similarly, its adjusted loss per share widened from -$0.13 to -$0.71, but that was also better than expectations of -$0.75. Its losses grew as it missed out on legacy sales from hardware and one-time software sales and ramped up spending on sales and marketing by 48.5% to $298.8 million to drive subscription sales. CEO Dheeraj Pandey said the company would continue to grow its sales force to strengthen the subscription business as long as the returns warrant it.
Source Fool.com
