Nutanix surpasses quarterly forecasts with 18% annual revenue growth driven by strong demand for infrastructure modernization
October 24, 2024 – Hyper-converged infrastructure giant Nutanix reported exceeding its quarterly forecasts. The company’s annual recurring revenue increased by 18%, and quarterly revenue grew by 16%, driven by strong demand for infrastructure modernization and new customer growth, supported by channel partners.
“We've seen significant growth in partner engagement over the last year. Part of this result comes from what we’re seeing with Broadcom, and part comes from our own incentive programs,” said Nutanix CEO Rajiv Ramaswami during a conference call with investors and analysts.
Key Quarterly Highlights
Among the company’s most significant wins this quarter were signing contracts with a global IT services provider in the Asia-Pacific region and a Fortune 100-listed food services provider. Both clients chose to reduce their reliance on large competitors.
“This allowed our customers to reduce their total cost of ownership by nearly 50%, while consolidating their existing data center,” Ramaswami added. “I’m pleased with our strong Q1 results and how we continue to innovate on our cloud platform, particularly in support of generative AI and modern applications.”
Sustained Revenue Growth and New Customers
Nutanix CFO Rukmini Sivaraman also emphasized that revenue growth was made possible by bringing new customers onto the company’s platform. She noted that significant contributions came from new programs aimed at driving new “logos,” as well as strong support from OEM manufacturers and channel partners.
“We’ve seen strong interest in our platform from new customers, especially amid market consolidation and M&A activity,” she told investors.
Annual Revenue and Future Outlook
For the quarter, Nutanix’s annual recurring revenue rose to $1.97 billion, compared to $1.66 billion for the same period last year. Quarterly revenue for the company was $591 million, a 16% increase from $511 million in the previous year. Operating income was $27.3 million, though it decreased by $5.7 million compared to last year.
Nutanix expects next quarter’s revenue to range between $635 million and $645 million. The forecast for the fiscal year is revenue between $2.43 billion and $2.46 billion.
Artificial Intelligence and New Opportunities
Ramaswami noted that AI-related spending is still in its early stages, but the company has already seen increased demand, particularly from large hyperscalers building massive clusters for training large language models (LLMs) for GPT In A Box 2.0.
Investors also inquired about when Nutanix plans to extend the availability of its Acropolis hypervisor with Dell storage to other OEMs. Ramaswami noted that the company is working on a new offering, PowerFlex, which is expected to become available in the first half of fiscal 2025 and should contribute to revenue growth in 2026.
Nutanix Shares Rise by 3%
Following positive financial news, Nutanix shares rose by more than 3% in after-hours trading, reaching $75 per share.