Data center infrastructure firms Nutanix Inc. and Pure Storage Inc. showed their resilience today, with both companies delivering financial results that surpassed Wall Street’s expectations. They also offered strong guidance for the next three months, sending their stock up higher in extended trading.
The results were all the more impressive as they came during a quarter that proved to be challenging for most other players in the enterprise infrastructure markets. Notably, the likes of Dell Technologies Inc. and HP Inc. scared off investors with their warnings of lower guidance, with the latter also missing its sales targets. Hewlett-Packard Enterprise Co. did a bit better, meeting expectations, but its legacy storage and server businesses both declined.
The performance of Nutanix in the quarter was therefore a welcome surprise. The company reported a fourth quarter loss before certain costs such as stock compensation of 17 cents per share on revenue of $385.5 million, up 1% and well ahead of Wall Street’s forecast of a 38 cents loss on $355.3 million in sales. Net losses for the period came to $358.1 million.
What really pleased investors though was Nutanix’s guidance for the first quarter of its fiscal 2023. It said it’s expecting revenue of between $410 million and $415 million, which is streets ahead of the consensus estimate of $372.6 million. For fiscal 2023, Nutanix expects revenue of $1.77 billion to $1.78 billion, versus Wall Street’s $1.66 billion estimate.
Investors cheered, with Nutanix’s stock jumping by more than 20% in after-hours trading, completely erasing a 4% slide during the regular session.
“Our fourth quarter capped off a fiscal year that showed strong year-over-year top and bottom line improvement,” said Nutanix President and Chief Executive Rajiv Ramaswami (pictured). “Fiscal 2022 was an important data point in demonstrating the long-term benefits of our subscription business model transition. We expect these benefits to compound further in the coming years as renewals become a bigger share of our business.”
Nutanix sells a software-defined hyperconverged infrastructure or HCI stack that integrates compute, storage and networking components into a single appliance or cloud service. While it still sells physical gear, the company has attempted to shift away from its hardware roots, putting more focus on its “hyperconvergence” software that can run on third-party servers and systems. At the same time, the company has also been urging customers to adopt its new subscription model.
“Our Fiscal 2022 results reflect strong progress on our subscription model with 27% year-over-year ACV billings growth and achievement of positive free cash flow, which we expect to be sustainable on an annual basis,” said Nutanix Chief Financial Officer Rukmini Sivaraman..
Last month, Ramaswami spoke with SiliconANGLE founder and longtime industry analyst John Furrier at Supercloud 22, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio.
Pure Storage’s stock didn’t quite hit the extreme heights that Nutanix enjoyed, but still rose more than 6% in extended trading in the wake of a solid earnings beat.
The company reported earning before certain costs of 32 cents per share, just ahead of the 31 cent per share consensus estimate. Revenue for the period came to $646.8 million, up 30% from the same period one year ago and comfortably ahead of the $634.2 million analyst forecast.
“Pure saw continued growth and solid market share gains as our expanding portfolio of industry leading products and services are recognized and embraced by more and more enterprises around the world,” said Pure Storage Chairman and CEO Charles Giancarlo. “Customers struggling with their ability to manage their exploding volumes of data look to Pure for simple, automated solutions.”
Pure Storage’s numbers were solid across the board, with annual recurring revenue up 31% to $953.3 million, and remaining performance obligations up 25% to $1.5 billion. The company also repurchased $61 million worth of stock in the quarter, ending it with $1.4 billion in cash, cash equivalents and marketable securities.
For the third quarter, Pure Storage said it’s predicting revenue of approximately $670 million, nicely ahead of Wall Street’s forecast of $651 million. For fiscal 2023 it has raised its guidance and now sees revenue of $2.75 billion, instead of the $2.66 billion it had previously forecast.
During the quarter just gone, Pure Storage debuted a new lineup of flash storage systems called FlashBlade//S, plus a reference architecture focused on artificial intelligence use cases.
Photo: SiliconANGLE
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September 01, 2022 at 06:48AM
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Nutanix and Pure Storage surprise Wall Street with solid earnings, sending their stocks higher - SiliconANGLE News
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