美国
证券和交易委员会
华盛顿特区 20549
表格
（标记一）
根据1934年证券交易法第13或15(d)节的季度报告 |
截至季度结束日期的财务报告
或
根据1934年证券交易法第13或15(d)条款的过渡报告 |
到 至
委员会档案编号：
（依凭章程所载的完整登记名称）
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(依据所在地或其他管辖区) 的注册地或组织地点) |
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(国税局雇主 识别号码) |
(总办事处地址，包括邮递区号)
(注册公司之电话号码，包括区号)
根据法案第12(b)条规定注册的证券：
每种类别的名称 |
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交易标的 |
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每个注册交易所的名称 |
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请勾选以下选项以表示申报人（1）已提交证券交易法1934年第13条或15(d)条所要求提交的所有报告，且在过去12个月中（或申报人需要提交此类报告的较短期间）已提交；（2）已受到过去90天内此类提交要求的限制。
请打勾表明申报人在过去的12个月（或申报人需在该较短期间内提交这些档案）中已根据《对S-t法规（本章节第232.405条）的规定405条》提交了所有必须提交的交互式资料档案。
请勾选相应的选项，以指示申报人是大型快速申报人、快速申报人、非快速申报人、较小型报告公司，还是新兴成长型公司。详细定义请参阅《交易所法》第1202条中的“大型快速申报人”、“快速申报人”、“较小型报告公司”和“新兴成长型公司”定义。
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☒ |
加速汇编申报人 |
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☐ |
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非加速文件提交者 |
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☐ |
小型报告公司 |
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新兴成长公司 |
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如果一家新兴成长型企业，请打勾表示公司已选择不使用扩展过渡期以符合根据《交易所法案》第13(a)条所提供的任何新的或修订财务会计准则。 ☐
请在核取方框内表明公司是否为空壳公司（根据交易所法规120亿2号所定义）。 是 ☐ 否
截至2024年11月30日，注册人持有
目录F 内容
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页码 |
第一部分。 |
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项目 1 |
6 |
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项目2 |
31 |
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项目 3 |
48 |
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项目4 |
48 |
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第二部分。 |
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项目 1 |
49 |
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项目1A |
49 |
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项目2 |
49 |
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项目 3 |
49 |
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项目4 |
49 |
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条款5 |
50 |
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条款6 |
50 |
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51 |
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3
关于前瞻性陈述的特别说明
本季度报告（表格10-Q）包含根据1933年《证券法》（修订版）第27A节和1934年《证券交易法》（修订版）第21E节的定义，明确和隐含的前瞻性陈述，这些陈述涉及重大风险和不确定性。除历史事实陈述外，本季度报告（表格10-Q）中包含的所有陈述，包括有关我们未来运营和财务状况、我们的业务策略和计划及我们未来运营目标的陈述，均为前瞻性陈述。 "相信"、"可能"、"将"、"潜在"、"估计"、"继续"、"预期"、"计划"、"打算"、"可以"、"将会"、"期待"或具有类似实质意义的词或表达，表明对未来事件或结果的不确定性，旨在识别前瞻性陈述。本季度报告（表格10-Q）中包括的前瞻性陈述包括但不限于有关以下内容的陈述：
4
我们对这些前瞻性陈述主要基于我们当前的期望和对未来事件及趋势的预测，这些事件和趋势可能影响我们的财务状况、运营结果、业务策略、短期和长期的业务运作及目标，以及根据我们目前可获得的信息的财务需求。这些前瞻性陈述受到多种风险、不确定性和假设的影响，包括我们在2024年7月31日结束的财年的10-K表格第一部分，第1A项下描述的"风险因素"。此外，我们的业务在一个非常竞争激烈和快速变化的环境中运营，新的风险时常出现。我们无法预测所有风险，也无法评估所有因素对我们业务的影响，或者任何因素或因素的组合可能在多大程度上导致实际结果与我们可能做出的任何前瞻性陈述中的结果显著不同。鉴于这些风险、不确定性和假设，本季度报告中讨论的前瞻性事件和趋势可能不会发生，实际结果可能会与预期或前瞻性陈述中暗示的结果大相径庭。
您不应将前瞻性声明视为对未来事件的预测。尽管我们相信前瞻性声明中反映的预期是合理的，但我们无法保证未来的结果、表现或前瞻性声明中反映的事件和情况将会实现或发生。本季度10-Q表格中的前瞻性声明仅与声明作出时的事件相关。我们不承担任何义务，并明确拒绝承担任何义务，更新、修改或以其他方式修订或公开发布任何对这些前瞻性声明的修订结果，以反映新信息或意外或后续事件的发生，法律另有要求的除外。我们可能无法实际实现前瞻性声明中披露的计划、意图或预期，因此您不应对我们的前瞻性声明过度依赖。
5
第一部分. 财务资讯AL资讯
项目 1. 财务状态表
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页面 |
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9 |
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10 |
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11 |
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12 |
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12 |
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18 |
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20 |
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23 |
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25 |
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25 |
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25 |
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28 |
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28 |
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29 |
6
nutanix, INC.
简明综合账目表缩编平衡表
(未经审计)
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截至 |
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7月31日， |
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10月31日 |
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（单位：千，每股资料除外） |
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资产 |
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流动资产: |
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现金及现金等价物 |
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$ |
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$ |
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短期投资 |
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结余应收帐款$ |
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递延佣金—当前 |
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预付费用及其他流动资产 |
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流动资产总额 |
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不动产及设备，净额 |
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营运租赁使用权资产 |
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递延佣金—非流动 |
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无形资产，扣除累计摊销 |
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商誉 |
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其他资产—非流动 |
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总资产 |
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$ |
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$ |
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负债及股东权益不足 |
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流动负债： |
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应付账款 |
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$ |
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应计的薪资和福利费用 |
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应计费用及其他流动负债 |
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Stockholders’ deficit: |
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Common stock |
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流动负债总额 |
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递延收入—非流动 |
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经营租赁负债—非流动 |
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可转换优先票据，净额 |
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其他负债—非流动 |
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总负债 |
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股东资本赤字： |
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普通股，面值$ |
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资本公积额额外增资 |
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其他综合收益累积额 |
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累积亏损 |
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股东权益的赤字为 |
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( |
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总负债及股东权益赤字 |
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$ |
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$ |
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请参阅附带的简化合并基本报表的说明。
7
nutanix, INC.
综合财务报表摘要综合损益表
(未经审计)
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截至三个月 |
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2023 |
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2024 |
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（单位：千，每股资料除外） |
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营业收入: |
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产品 |
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$ |
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$ |
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压力位、权益及其他服务 |
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总营业收入 |
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营业成本: |
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产品 |
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支持、权利和其他服务 |
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总营业成本 |
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毛利润 |
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营运费用： |
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销售和市场推广 |
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研发 |
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一般及行政费用 |
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营业费用总额 |
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营运(亏损)收入 |
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其他（费用）收入，净 |
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(亏损) 税前收入 |
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所得税准备 |
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净（损失）收入 |
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$ |
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归属于A类的每股净(亏损)收入 |
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$ |
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归属于A类普通股东的净(亏损)每股收益 |
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$ |
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计算归属于A类普通股东的净 |
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计算归属于A类普通股东的净 |
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请参阅附带的简化合并基本报表的说明。
8
nutanix, INC.
综合总表综合收益 (损失) 的报告
(未经审计)
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截至三个月 |
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2023 |
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2024 |
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（以千为单位) |
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净（损失）收入 |
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其他综合收益，税后净额： |
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可供出售证券未实现收益的变动 |
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综合(亏损)收益 |
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$ |
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$ |
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请参阅附带的简化合并基本报表的说明。
9
nutanix, INC.
压缩的综合报表 股东赤字表
(未经审计)
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2023年10月31日结束的三个月 |
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普通股 |
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追加 |
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累积的 |
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累积的 |
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总计 |
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股份 |
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金额 |
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资本 |
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损失 |
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赤字 |
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赤字 |
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（以千为单位) |
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2023年7月31日余额 |
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$ |
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$ |
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$ |
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$ |
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$ |
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通过员工股权发行普通股 |
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— |
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— |
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— |
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通过ESPP购买发行普通股 |
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— |
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— |
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— |
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购回和撤销普通股 |
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— |
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— |
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基于股票的薪酬 |
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— |
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— |
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— |
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其他综合收益 |
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— |
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— |
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— |
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— |
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净亏损 |
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— |
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— |
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— |
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— |
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( |
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( |
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余额 - 2023年10月31日 |
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$ |
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$ |
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$ |
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$ |
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截至2024年10月31日的三个月 |
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普通股 |
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追加 |
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累积的 |
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累积的 |
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总计 |
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股份 |
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金额 |
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资本 |
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收入 |
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赤字 |
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赤字 |
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（以千为单位) |
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余额 - 2024年7月31日 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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通过员工股权发行普通股 |
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— |
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— |
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— |
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通过ESPP购买发行普通股 |
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— |
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— |
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— |
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与净分享结算相关的股份 |
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( |
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— |
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( |
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— |
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— |
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( |
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购回和撤销普通股 |
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( |
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— |
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( |
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— |
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( |
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( |
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基于股票的薪酬 |
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— |
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— |
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— |
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— |
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其他综合收益 |
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— |
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— |
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— |
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— |
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净利润 |
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— |
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— |
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— |
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— |
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余额 - 2024年10月31日 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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请参阅附带的简化合并基本报表的说明。
10
nutanix, INC.
简化合并财务报表现金流量表
(未经审计)
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截至三个月 |
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2023 |
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2024 |
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（以千为单位) |
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经营活动现金流量： |
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净（损失）收入 |
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$ |
( |
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$ |
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调整净损失为经营活动提供的净现金流量： |
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折旧及摊销 |
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基于股票的薪酬 |
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债务折价和发行成本摊销 |
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经营租赁成本，减除增值 |
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非现金利息费用 |
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其他 |
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营运资产和负债的变化： |
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应收帐款，净额 |
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推延佣金 |
|
|
|
|
|
|
||
预付费用及其他资产 |
|
|
|
|
|
( |
) |
|
应付账款 |
|
|
|
|
|
( |
) |
|
应计的薪资和福利费用 |
|
|
( |
) |
|
|
( |
) |
应计费用及其他负债 |
|
|
( |
) |
|
|
( |
) |
购并支付金额，扣除所获现金 |
|
|
( |
) |
|
|
( |
) |
透过收入 |
|
|
|
|
|
|
||
经营活动产生的净现金流量 |
|
|
|
|
|
|
||
投资活动之现金流量: |
|
|
|
|
|
|
||
通过员工股权激励计划出售股份的收益 |
|
|
|
|
|
|
||
投资购买 |
|
|
( |
) |
|
|
( |
) |
购置财产及设备 |
|
|
( |
) |
|
|
( |
) |
投资活动中使用的净现金 |
|
|
( |
) |
|
|
( |
) |
来自筹资活动的现金流量: |
|
|
|
|
|
|
||
通过员工股权激励计划出售股份所得款项 |
|
|
|
|
|
|
||
现金及现金等价物与受限现金—期初 |
|
|
|
|
|
( |
) |
|
购回普通股 |
|
|
( |
) |
|
|
( |
) |
$ |
|
|
( |
) |
|
|
( |
) |
筹集资金的净现金流量 |
|
|
( |
) |
|
|
( |
) |
现金、现金等价物和受限现金的净增加 |
|
$ |
|
|
$ |
|
||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
||
Cash paid for income taxes |
|
$ |
|
|
$ |
|
||
限制性现金 (1) |
|
|
|
|
|
|
||
资产买入中包含应付账款以及 |
|
$ |
|
|
$ |
|
||
现金流资讯的补充揭示： |
|
|
|
|
|
|
||
支付所得税现金 |
|
$ |
|
|
$ |
|
||
非现金投资和融资信息的补充披露 |
|
|
|
|
|
|
||
购买的房地产和设备包括在应付账款中 |
|
$ |
|
|
$ |
|
||
净股份结算的未支付税款包括在应计费用和其他负债中 |
|
$ |
|
|
$ |
|
||
请参阅附带的简化合并基本报表的说明。
11
注释 1. 概述与B当前展示的基础
组织和业务简介
Nutanix, Inc. 于2009年9月在特拉华州成立。Nutanix, Inc. 总部位于加利福尼亚州圣荷西，并与其全资子公司（统称为“我们”、“我们的”或“Nutanix”）一起，在北美、欧洲、亚太、中东、拉丁美洲和非洲开展业务。
我们是云软件的全球领导者，为组织提供一个单一平台，在任何地方运行应用程序和管理数据。我们的愿景是让混合多云部署变得简单，使客户能够专注于实现他们的业务目标。我们的使命是通过一个开放的混合多云平台，提供丰富的数据服务，以运行和管理任何应用程序，无论在何处。
我们的Nutanix云平台旨在使组织能够构建混合多云基础设施，提供一致的云操作模型，采用一个单一平台，在核心数据中心、边缘和公共云中运行应用程序和管理数据，同时支持各种虚拟机监控程序和容器平台。Nutanix云平台支持多种工作负载，具有不同的计算、存储和网络要求，包括关键业务应用程序、数据平台（包括SQL和NoSQL数据库以及商业智能应用程序）、通用工作负载（包括系统基础设施、网络和安防-半导体），以及终端用户计算和虚拟桌面基础设施服务，以及企业人工智能（“人工智能”）工作负载（包括机器学习和生成性人工智能工作负载）和云原生应用程序（包括现代的、容器化的应用程序）。
我们的业务组织为一个单一的运营和可报告的部门。我们的订阅式商业模式为客户提供灵活性，以根据其特定的业务需求选择首选的许可级别和期限。基于订阅的商业模式意味着我们的产品，包括相关的支持和授权安排，以一定的期限出售。我们的解决方案主要通过渠道合作伙伴和原始设备制造商（“OEMs”）（统称为“合作伙伴”）销售，并直接交付给我们的最终客户。
合并原则和重要会计政策
所附的简明合并基本报表，包括了nutanix，Inc.及其全资子公司的账户，已遵循美国普遍接受的会计原则（"U.S. GAAP"）编制，并在所有重大方面与我们截至2024年7月31日的10-k表年度报告中包含的原则一致，该报告于2024年9月19日提交给证券交易委员会（"SEC"）。所有的关联公司账目和交易都已在合并中消除。该简明合并基本报表未经审计，但包含了为公正呈现我们季度结果所需的所有正常经常性调整。截至2024年7月31日的合并资产负债表来源于经过审计的基本报表；然而，它不包括U.S. GAAP对完整基本报表所需的所有信息和附注。这些简明合并基本报表应与我们截至2024年7月31日的10-k表年度报告中的合并基本报表和相关说明一起阅读。.
12
估算的使用
根据美国公认会计原则编制中期简明合并财务报表要求管理层做出影响简明合并财务报表和附注中报告的金额的估计和假设。此类管理估计和假设包括但不限于对产品和相关支持的销售价格的最佳估计；无形资产和财产及设备的使用寿命和可收回性；信贷损失备抵额；股票奖励公允价值的确定；所得税会计，包括递延所得税资产的估值补贴和不确定的税收状况；对合同制造商的购买承诺负债；销售佣金支出和递延佣金的受益期；是否一种安排是或包含租赁；衡量使用权资产和租赁负债现值的增量借款利率；用于确定与先前未清偿债务转换特征相关的或有负债公允价值的投入
风险集中
收入和应收账款的集中 — 我们主要通过合作伙伴销售产品，偶尔直接向终端客户销售产品。在截至 2023 年 10 月 31 日和 2024 年 10 月 31 日的三个月，最终客户的占比不超过
对于每个重要合作伙伴，收入占总收入的百分比和应收账款占应收账款总额的百分比净额如下：
|
|
收入 |
|
|
截至的应收账款 |
|
||||||||||
|
|
三个月结束 |
|
|
七月三十一日， |
|
|
十月三十一日 |
|
|||||||
合作伙伴 |
|
2023 |
|
|
2024 |
|
|
|
|
|
|
|
||||
合作伙伴 A |
|
(1) |
|
|
|
% |
|
|
% |
|
|
% |
||||
合作伙伴 B |
|
(1) |
|
|
(1) |
|
|
(1) |
|
|
|
% |
||||
合作伙伴 C |
|
(1) |
|
|
(1) |
|
|
(1) |
|
|
|
% |
||||
合作伙伴 D |
|
|
% |
|
|
% |
|
|
% |
|
(1) |
|
||||
合作伙伴 E |
|
|
% |
|
|
% |
|
(1) |
|
|
(1) |
|
||||
合作伙伴 F |
|
|
% |
|
|
% |
|
|
% |
|
(1) |
|
||||
重要会计政策摘要
最近发布但尚未通过的会计公告
2023年11月，财务会计准则委员会（“FASB”）发布了《2023-07年会计准则更新》（“ASU”），《分部报告（主题280）：对应报告的分部披露的改进》，该报告要求按年度和中期披露增量分部信息。本更新中的修正案自2023年12月15日之后的年度内生效，允许提前采用，并要求在完全追溯的基础上申请。新的亚利桑那州立大学将从2025财年的10-k表格开始对我们生效。我们目前正在评估这项新标准将对我们的披露产生的影响。
13
在2023年12月，FASB发布了ASU 2023-09，所得税（主题740）：所得税披露改进，该标准对所得税披露进行改进。该标准要求提供有关报告实体有效税率调节的分项信息，以及已缴纳所得税的信息。本次更新的修订适用于2024年12月15日之后开始的财年，允许提前采用。这个新的ASU将于我们2026财年开始生效。我们目前正在评估这一新标准对我们披露的影响。
在2024年11月，FASB发布了ASU 2024-03，损益表—综合收益报告—费用分项披露（子主题220-40）：损益表费用的分项，要求在财务报表附注中对某些类别的费用提供额外的分项披露，这些费用也被列示在运营报表的面上。这个新的ASU适用于2026年12月15日之后开始的财年，以及2027年12月15日之后开始的中期报告期，允许提前采用。这个新的ASU将于我们2028财年开始生效。 我们目前正在评估这一新标准对我们披露的影响。
注意事项 2。收入，递延收入场地和延期佣金
收入分解和收入确认
Nutanix 云平台可以部署在核心数据中心、边缘或公共云中，在各种合格的硬件平台（包括 Nutanix 品牌的 NX 硬件系列）上运行，通过 Nutanix 云集群部署在亚马逊网络服务（“AWS”）和微软 Azure 等流行的公有云环境中，或者，如果是基于云的软件和软件即服务（“SaaS”）产品，则可以通过托管服务部署。我们基于订阅期限的许可证单独出售，也可以与按订单配置的服务器一起出售。我们基于订阅期限的许可证的期限通常从 至
下表描述了按收入类型分列的收入情况，这与我们评估财务业绩的方式一致：
|
|
三个月结束 |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(以千计) |
|
|||||
订阅 |
|
$ |
|
|
$ |
|
||
专业服务 |
|
|
|
|
|
|
||
其他非订阅产品 |
|
|
|
|
|
|
||
总收入 |
|
$ |
|
|
$ |
|
||
订阅收入 — 订阅收入包括任何有明确期限的履约义务，该义务来自软件授权和支持订阅、订阅软件许可证和基于云的SaaS产品的销售。
专业服务收入 — 我们还通过我们的产品销售专业服务。我们在提供专业服务时确认与之相关的收入。
14
其他非订阅产品营业收入 — 其他非订阅产品营业收入包括约 $
具有多项履约义务的合同 - 我们与客户的大多数合同包含多项履约义务。对于这些合同，如果它们是独立的，我们将单独为每项履约义务进行核算。交易价格按照相对独立销售价格（“SSP”）的基础分配给单独的履约义务。对于我们经常单独销售的交付成果，例如我们核心产品的软件许可和支持订阅，我们通过评估过去12个月内的独立销售来确定SSP。对于那些不经常销售的产品，我们通过考虑市场条件和其他因素（包括合同的价值、销售的产品和地理位置等）来确定SSP。
合同余额 - 营业收入确认的时间可能与向客户开具发票的时间不同。应收账款按照开具的金额减去信用损失准备计提额净额计入。在我们交付商品或提供服务的期间，或我们收取款项的权利无条件时，将确认应收账款。在收入确认早于开票的情况下，将创建未开票应收账款，代表合同资产。未开票应收账款的余额，包括在资产负债表上的应收账款净额，为$
我们的客户通常提前开具发票，包括多年订阅的发票，付款期限为30-45天。我们通过考虑过去的收款经验、客户的信用质量、应收账款余额的年龄、当前和未来的经济状况以及可能影响已报金额的收回性的预测来评估应收账款的信用损失。截至2024年7月31日和2024年10月31日的应收账款净额，减去信用损失准备金，在随附的简明合并资产负债表中呈现。
获取和履行合同的成本 - 我们在客户签订合同时会资本化支付给销售人员的佣金以及相关的薪资税。这些成本记录为简明合并资产负债表中的递延佣金，分为流动和非流动部分。我们根据销售报酬计划判断是否应推迟成本，如果佣金是增量的并且在未签订客户合同的情况下不会发生，我们认为应推迟这些成本。根据预期受益期间超过初始合同期限的佣金支付，而预计续约时支付的佣金与初始合同不成正比，我们按照与整个受益期间的收入确认模式一致的系统方式确认递延成本，并将其包括在简明合并利润表的销售和营销费用中。我们通过评估客户合同的预期续约、与客户的关系持续时间、客户保留数据、我们的科技发展生命周期和其他因素来确定预期受益期间。递延成本会定期进行减值检查。
由政府机构征收的税款，并且与我们和客户之间特定营业收入交易同时征收的税款，在我们的简明综合经营报表中以净基础呈现。
15
延迟营业收入 — 延迟营业收入主要包括已开具发票但尚未确认为营业收入的金额，主要涉及软件授权和支持订阅以及专业服务。 延迟营业收入的流动部分表示预计将在简明综合资产负债表日期的一年内确认为营业收入的金额。
所提供期间延迟营业收入（合同负债）和推迟佣金（合同资产）的重大变化如下：
|
|
递延 |
|
|
递延 |
|
||
|
|
（以千为单位) |
|
|||||
截至2024年7月31日的结余 |
|
$ |
|
|
$ |
|
||
增加 (1) |
|
|
|
|
|
|
||
已确认的营业收入/佣金 |
|
|
( |
) |
|
|
( |
) |
截至2024年10月31日的余额 |
|
$ |
|
|
$ |
|
||
截至2023年10月31日的三个月期间，我们确认了约$的营业收入
的部分递延金额。我们很多已签的但未开具发票的履行义务受取消条款约束。分配给剩余履约义务的营业收入代表尚未确认的合同收入（“合同未认可”），其中包括递延营收和将在未来阶段开具发票并确认为营收的不可取消金额，不包括受取消条款约束的履约义务。截至
注意事项 3. 公允价值UE 测量
我们按照持续计量基础衡量的金融资产的公允价值如下：
|
|
截至2024年7月31日 |
|
|||||||||||||
|
|
一级 |
|
|
二级 |
|
|
三级 |
|
|
总计 |
|
||||
|
|
（以千为单位) |
|
|||||||||||||
财务资产，流动资产： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
现金等价物： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
货币市场基金 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
美国政府有价证券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
商业本票 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
短期投资： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
公司债券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
商业本票 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
美国政府有价证券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
按公允价值计量的总额 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
现金 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
现金、现金等价物及短期投资总额 |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
金融资产，非流动资产： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
可转换债券应收款项 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
16
|
|
截至2024年10月31日 |
|
|||||||||||||
|
|
一级 |
|
|
二级 |
|
|
三级 |
|
|
总计 |
|
||||
|
|
(以千为单位) |
|
|||||||||||||
流动金融资产： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
现金及现金等价物： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
货币市场基金 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
美国政府债券 |
|
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|
|
|
|
|
|
|
|
|
|
||||
商业票据 |
|
|
|
|
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|
|
|
|
|
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|
||||
短期投资： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
公司债券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
商业票据 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
美国政府债券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
总计以公允价值计量 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
现金 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
现金、现金等价物和短期投资总和 |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
非流动财务资产： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
可转换的应收票据 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
未根据持续基础上的公允价值核算的金融工具
我们按公允价值报告我们的金融工具，除了2027年到期的可转换高级票据（"2027票据"）外。未按持续基础上的公允价值核算的金融工具，出于披露目的按季度公允价值计量。
|
|
截至2024年7月31日 |
|
|
截至2024年10月31日 |
|
||||||||||
|
|
资产 |
|
|
估算的 |
|
|
价值 |
|
|
估计 |
|
||||
|
|
(以千计) |
|
|||||||||||||
2027票据 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
截至2024年7月31日和2024年10月31日的2027票据账面价值减去未摊销的债券发行成本 减去未摊销的债券发行成本$
2027年票据的总估计公平价值是基于每$的收盘交易价格确定的
17
注释 4. 余额 资产负债表 元件
短期投资
我们短期投资的摊销成本大致与其公允价值相符。与我们短期投资相关的未实现损失通常由于利率波动，而非信用质量引起。然而，我们会审查处于未实现损失状态的个别证券，以评估它们是否经历或预期会经历导致公允价值下降的信用损失。截至2024年7月31日和2024年10月31日，我们的短期投资未实现的收益和损失不重大，且并非由于信用质量下降造成。因此，截至2024年7月31日和2024年10月31日，我们未记录这些投资的任何信用损失。
下表总结了我们在可交易债务证券中按合同到期日估计的公允价值：
|
|
截至 |
|
|
|
|
（以千为单位) |
|
|
一年内到期的 |
|
$ |
|
|
到期时间为一至三年 |
|
|
|
|
总计 |
|
$ |
|
|
预付费用和其他流动资产
预付费用和其他流动资产包括以下内容：
|
|
截至 |
|
|||||
|
|
7月31日， |
|
|
10月31日 |
|
||
|
|
（以千为单位) |
|
|||||
预付营业费用 |
|
$ |
|
|
$ |
|
||
增值税应收款 |
|
|
|
|
|
|
||
其他流动资产 |
|
|
|
|
|
|
||
预付费用及其他流动资产总额 |
|
$ |
|
|
$ |
|
||
18
资产和设备，净值
资产和设备净值包括以下内容:
|
|
|
|
截至 |
|
|||||
|
|
估计 |
|
7月31日， |
|
|
10月31日 |
|
||
|
|
(以月为单位) |
|
（以千为单位) |
|
|||||
计算机、生产、工程和其他设备 |
|
|
$ |
|
|
$ |
|
|||
演示单元 |
|
|
|
|
|
|
|
|||
租赁改良 |
|
(1) |
|
|
|
|
|
|
||
软件 |
|
(2) |
|
|
|
|
|
|
||
家具及装置 |
|
|
|
|
|
|
|
|||
资产总计，原值 |
|
|
|
|
|
|
|
|
||
减：累积折旧 |
|
|
|
|
( |
) |
|
|
( |
) |
总固定资产净值 |
|
|
|
$ |
|
|
$ |
|
||
与我们的物业和设备相关的折旧费用为$
商誉和无形资产净额
截至2024年10月31日的三个月内，商誉的账面价值没有变化。
无形资产，净额由以下项目组成：
|
|
截至 |
|
|||||
|
|
7月31日， |
|
|
10月31日 |
|
||
|
|
（以千为单位) |
|
|||||
开发出的科技 |
|
$ |
|
|
$ |
|
||
客户关系 |
|
|
|
|
|
|
||
商标 |
|
|
|
|
|
|
||
总无形资产，毛额 |
|
|
|
|
|
|
||
减去： |
|
|
|
|
|
|
||
开发科技的累计摊销 |
|
|
( |
) |
|
|
( |
) |
客户关系的累计摊销 |
|
|
( |
) |
|
|
( |
) |
商标的累计摊销 |
|
|
( |
) |
|
|
( |
) |
累计摊销总额 |
|
|
( |
) |
|
|
( |
) |
无形资产总额，净额 |
|
$ |
|
|
$ |
|
||
与我们的无形资产相关的摊销费用在压缩合并运营报表中被确认，属于开发科技的产品成本和客户关系及商标的销售和营销费用。
19
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The estimated future amortization expense of our intangible assets is as follows:
Fiscal Year Ending July 31: |
|
Amount |
|
|
|
|
(in thousands) |
|
|
2025 (remaining nine months) |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
Accrued Compensation and Benefits
Accrued compensation and benefits consists of the following:
|
|
As of |
|
|||||
|
|
July 31, |
|
|
October 31, |
|
||
|
|
(in thousands) |
|
|||||
Payroll taxes payable |
|
$ |
|
|
$ |
|
||
Accrued wages and taxes |
|
|
|
|
|
|
||
Accrued vacation |
|
|
|
|
|
|
||
Accrued commissions and taxes |
|
|
|
|
|
|
||
Accrued benefits |
|
|
|
|
|
|
||
Contributions to ESPP withheld |
|
|
|
|
|
|
||
Accrued bonus |
|
|
|
|
|
|
||
Retirement 401(k) payable |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued compensation and benefits |
|
$ |
|
|
$ |
|
||
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consists of the following:
|
|
As of |
|
|||||
|
|
July 31, |
|
|
October 31, |
|
||
|
|
(in thousands) |
|
|||||
Accrued professional services |
|
$ |
|
|
$ |
|
||
Income taxes payable |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued expenses and other current liabilities |
|
$ |
|
|
$ |
|
||
NOTE 5. CONVERTIBLE SENIOR NOTES
2026 Notes
In September 2020, we issued $
20
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
On June 6, 2024, Bain delivered a notice of conversion to convert $
The 2026 Notes were converted in accordance with its original terms and conditions. Upon conversion, because the carrying amount of the conversion option was previously reclassified to equity, the unamortized discount remaining at the date of conversion was recognized as interest expense. The remaining carrying amount of the 2026 Notes was reduced by the cash transferred and then recognized in equity, such that no gain or loss was recognized. In addition, the accrued and unpaid interest as of the conversion date was forgiven pursuant to the terms of the indenture and recognized in equity.
The following table sets forth the total interest expense recognized related to the 2026 Notes:
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Interest expense related to amortization of debt discount |
|
$ |
|
|
$ |
|
||
Interest expense related to amortization of debt issuance |
|
|
|
|
|
|
||
Non-cash interest expense |
|
|
|
|
|
|
||
Total interest expense |
|
$ |
|
|
$ |
|
||
Non-cash interest expense was related to the
2027 Notes
In September 2021, we issued $
The 2027 Notes bear interest at a rate of
21
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The 2027 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of Class A common stock, at our election. Each $
Upon conversion of the 2027 Notes, we will pay or deliver, as the case may be, cash, shares of our Class A common stock or a combination of cash and shares of Class A common stock, at our election.
The conversion rate will be subject to adjustment in certain events, but will not be adjusted for any accrued or unpaid interest. Holders who convert their 2027 Notes in connection with certain corporate events that constitute a "make-whole fundamental change" (as defined in the indenture governing the 2027 Notes) are, under certain circumstances, entitled to an increase in the conversion rate. In addition, if we undergo a "fundamental change" (as defined in the indenture governing the 2027 Notes) prior to the maturity date, holders of the 2027 Notes may require us to repurchase for cash all or a portion of their 2027 Notes at a repurchase price equal to
In accounting for the exchange of convertible notes, we evaluated whether the transaction should be treated as a modification or extinguishment transaction. The partial exchange of the 2023 Notes and issuance of the 2027 Notes were deemed to have substantially different terms due to the significant difference between the value of the conversion option immediately prior to and after the exchange, and consequently, the 2023 Notes partial exchange was accounted for as a debt extinguishment. The $
The 2027 Notes consisted of the following:
|
|
As of |
|
|||||
|
|
July 31, |
|
|
October 31, |
|
||
|
|
(in thousands) |
|
|||||
Principal amounts: |
|
|
|
|
|
|
||
Principal |
|
$ |
|
|
$ |
|
||
Unamortized debt issuance costs (1) |
|
|
( |
) |
|
|
( |
) |
Net carrying amount |
|
$ |
|
|
$ |
|
||
22
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
As of October 31, 2024, the remaining life of the 2027 Notes was approximately
The following table sets forth the total interest expense recognized related to the 2027 Notes:
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Contractual interest expense |
|
$ |
|
|
$ |
|
||
Interest expense related to amortization of debt issuance |
|
|
|
|
|
|
||
Total interest expense |
|
$ |
|
|
$ |
|
||
NOTE 6. LEASES
We have operating leases for offices, research and development facilities, and data centers and finance leases for certain data center equipment. Our leases have remaining lease terms of
Total operating lease cost was $
Supplemental balance sheet information related to our leases is as follows:
|
|
As of |
|
|||||
|
|
July 31, |
|
|
October 31, |
|
||
|
|
(in thousands) |
|
|||||
Operating leases: |
|
|
|
|
|
|
||
Operating lease right-of-use assets, gross |
|
$ |
|
|
$ |
|
||
Accumulated amortization |
|
|
( |
) |
|
|
( |
) |
Operating lease right-of-use assets, net |
|
$ |
|
|
$ |
|
||
Operating lease liabilities—current |
|
$ |
|
|
$ |
|
||
Operating lease liabilities—non-current |
|
|
|
|
|
|
||
Total operating lease liabilities |
|
$ |
|
|
$ |
|
||
Weighted average remaining lease term (in years): |
|
|
|
|
|
|
||
Weighted average discount rate: |
|
|
% |
|
|
% |
||
23
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
|
|
As of |
|
|||||
|
|
July 31, |
|
|
October 31, |
|
||
|
|
(in thousands) |
|
|||||
Finance leases: |
|
|
|
|
|
|
||
Finance lease right-of-use assets, gross (1) |
|
$ |
|
|
$ |
|
||
Accumulated amortization (1) |
|
|
( |
) |
|
|
( |
) |
, net (1) |
|
$ |
|
|
$ |
|
||
(2) |
|
$ |
|
|
$ |
|
||
(3) |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
Weighted average remaining lease term (in years): |
|
|
|
|
|
|
||
Weighted average discount rate: |
|
|
% |
|
|
% |
||
Supplemental cash flow and other information related to our leases is as follows:
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Cash paid for amounts included in the measurement of |
|
|
|
|
|
|
||
Operating cash flows from operating leases |
|
$ |
|
|
$ |
|
||
Operating cash flows from finance leases |
|
$ |
|
|
$ |
|
||
Financing cash flows from finance leases |
|
$ |
|
|
$ |
|
||
Lease liabilities arising from obtaining right-of-use assets: |
|
|
|
|
|
|
||
Operating leases |
|
$ |
|
|
$ |
|
||
The undiscounted cash flows for our lease liabilities as of October 31, 2024 were as follows:
Fiscal Year Ending July 31: |
|
Operating |
|
|
Finance |
|
|
Total |
|
|||
|
|
(in thousands) |
|
|||||||||
2025 (remaining nine months) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
2026 |
|
|
|
|
|
|
|
|
|
|||
2027 |
|
|
|
|
|
|
|
|
|
|||
2028 |
|
|
|
|
|
|
|
|
|
|||
2029 |
|
|
|
|
|
|
|
|
|
|||
Thereafter |
|
|
|
|
|
|
|
|
|
|||
Total lease payments |
|
|
|
|
|
|
|
|
|
|||
Less: imputed interest |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total lease obligation |
|
|
|
|
|
|
|
|
|
|||
Less: current lease obligations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Long-term lease obligations |
|
$ |
|
|
$ |
|
|
$ |
|
|||
As of October 31, 2024, we had additional operating lease commitments of approximately $
24
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 7. COMMITMENTS AND CONTINGENCIES
Purchase Commitments
In the normal course of business, we make commitments with our contract manufacturers to ensure them a minimum level of financial consideration for their investment in our joint solutions. These commitments are based on performance targets or on-hand inventory and non-cancelable purchase orders for non-standard components. We record a charge related to these items when we determine that it is probable a loss will be incurred and we are able to estimate the amount of the loss. Our historical charges have not been material. As of October 31, 2024, we had approximately $
Legal Proceedings
We are not currently a party to any legal proceedings that we believe to be material to our business or financial condition. From time to time, we may become party to various litigation matters and subject to claims that arise in the ordinary course of business.
NOTE 8. STOCKHOLDERS’ EQUITY
We have
Holders of Class A common stock are entitled to
Share Repurchases
In August 2023, our Board of Directors authorized the repurchase of up to $
NOTE 9. EQUITY INCENTIVE PLANS
Stock Plans
We have
25
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Under the 2016 Plan, we may grant incentive stock options, non-statutory stock options, restricted stock, RSUs, and stock appreciation rights to employees, directors and consultants. We initially reserved
Restricted Stock Units
RSUs settle into shares of Class A common stock upon vesting. During the second quarter of fiscal 2024, we began funding withholding taxes due on the vesting of employee RSUs by net share settlement, rather than our previous approach of selling shares of Class A common stock to cover taxes upon vesting of such awards. The payment of the withheld taxes to the tax authorities is reflected as a financing activity within the condensed consolidated statements of cash flows.
Performance RSUs
From time to time, we grant RSUs that have both service and performance conditions to our executives and employees ("PRSUs"). Vesting of PRSUs is subject to continuous service and the satisfaction of certain performance targets. While we recognize cumulative stock-based compensation expense for the portion of the awards for which both the service condition has been satisfied and it is probable that the performance conditions will be met, the actual vesting and settlement of PRSUs are subject to the performance conditions actually being met.
Market Stock Units
We also grant RSUs that have both service and market-based conditions to our executives and employees ("MSUs"). Vesting of MSUs is subject to continuous service and the satisfaction of certain market-based performance targets. While we recognize cumulative stock-based compensation expense for the portion of the awards for which the service condition has been satisfied, regardless of achievement of the specified targets, the actual vesting and settlement of MSUs are subject to the market-based conditions actually being met.
In August 2023, the Compensation Committee of our Board of Directors approved the grant of approximately
In September 2024, the Compensation Committee of our Board of Directors approved the grant of approximately
26
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Below is a summary of RSU activity and PRSU and MSU (collectively, "PSU") activity under the Stock Plans:
|
|
RSUs |
|
|
PSUs |
|
||||||||||
|
|
Number of |
|
|
Weighted Average |
|
|
Number of |
|
|
Weighted Average |
|
||||
|
|
(in thousands) |
|
|
|
|
|
(in thousands) |
|
|
|
|
||||
Outstanding at July 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Released |
|
|
( |
) |
|
$ |
|
|
|
( |
) |
|
$ |
|
||
Forfeited |
|
|
( |
) |
|
$ |
|
|
|
( |
) |
|
$ |
|
||
Outstanding at October 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Stock Options
We did
Employee Stock Purchase Plan
In December 2015, our Board of Directors adopted the 2016 Employee Stock Purchase Plan, which was subsequently amended in January 2016 and September 2016 and approved by our stockholders in March 2016 (the "Original 2016 ESPP"). The Original 2016 ESPP became effective in connection with our IPO. Our stockholders subsequently approved amendments to the Original 2016 ESPP in December 2019 and December 2022 (as amended, the "2016 ESPP"). Under the 2016 ESPP, the maximum number of shares of Class A common stock available for sale is
The 2016 ESPP allows eligible employees to purchase shares of our Class A common stock at a discount through payroll deductions of up to
On each purchase date, participating employees will purchase Class A common stock at a price per share equal to
During the three months ended October 31, 2024,
We use the Black-Scholes option pricing model to determine the fair value of shares purchased under the 2016 ESPP with the following weighted average assumptions on the date of grant:
|
|
Three Months Ended October 31, |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
Expected term (in years) |
|
|
|
|
|
|
||
Risk-free interest rate |
|
|
% |
|
|
% |
||
Volatility |
|
|
% |
|
|
% |
||
Dividend yield |
|
|
% |
|
|
% |
||
27
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Stock-Based Compensation
Total stock-based compensation expense recognized in the condensed consolidated statements of operations is as follows:
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Cost of revenue: |
|
|
|
|
|
|
||
Product |
|
$ |
|
|
$ |
|
||
Support, entitlements and other services |
|
|
|
|
|
|
||
Sales and marketing |
|
|
|
|
|
|
||
Research and development |
|
|
|
|
|
|
||
General and administrative |
|
|
|
|
|
|
||
Total stock-based compensation expense |
|
$ |
|
|
$ |
|
||
As of October 31, 2024, unrecognized stock-based compensation expense related to outstanding stock awards was approximately $
NOTE 10. INCOME TAXES
Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by giving effect to potentially dilutive common stock equivalents outstanding during the period, as their effect would be dilutive. Potentially dilutive common shares include shares issuable upon the exercise of stock options, the vesting of RSUs and PSUs, and each purchase under the 2016 ESPP, and common stock issuable upon the conversion of convertible debt under the if-converted method.
In loss periods, basic net loss per share and diluted net loss per share are the same, as the effect of potential common shares is antidilutive and therefore excluded.
28
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The computation of basic and diluted net income (loss) per share attributable to common stockholders is as follows:
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands, except per share data) |
|
|||||
Numerator: |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Add: Interest expense related to convertible senior |
|
|
|
|
|
|
||
Diluted net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Denominator: |
|
|
|
|
|
|
||
Weighted average shares, basic |
|
|
|
|
|
|
||
Add: Dilutive effect of common stock equivalents |
|
|
|
|
|
|
||
Weighted average shares, diluted |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Net (loss) income per share attributable to Class A |
|
$ |
( |
) |
|
$ |
|
|
Net (loss) income per share attributable to Class A |
|
$ |
( |
) |
|
$ |
|
|
The following shares of common stock were excluded from the computation of diluted net (loss) income per share for the periods presented, as their effect would have been antidilutive:
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Outstanding stock options, RSUs and PSUs |
|
|
|
|
|
|
||
Employee stock purchase plan |
|
|
|
|
|
|
||
Common stock issuable upon the conversion of convertible |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
NOTE 12. SEGMENT INFORMATION
Our chief operating decision maker is a group which is comprised of our Chief Executive Officer and Chief Financial Officer. This group reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, we have a reportable segment.
The following table sets forth revenue by geographic location based on bill-to location:
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
U.S. |
|
$ |
|
|
$ |
|
||
Europe, the Middle East and Africa |
|
|
|
|
|
|
||
Asia Pacific |
|
|
|
|
|
|
||
Other Americas |
|
|
|
|
|
|
||
Total revenue |
|
$ |
|
|
$ |
|
||
29
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following table sets forth long-lived assets, which primarily include property and equipment, net, by geographic location:
|
|
As of |
|
|||||
|
|
July 31, |
|
|
October 31, |
|
||
|
|
(in thousands) |
|
|||||
United States |
|
$ |
|
|
$ |
|
||
International |
|
|
|
|
|
|
||
Total long-lived assets |
|
$ |
|
|
$ |
|
||
30
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition, results of operations and cash flows should be read in conjunction with (1) the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (2) the audited consolidated financial statements and notes thereto and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 filed on September 19, 2024. The last day of our fiscal year is July 31. Our fiscal quarters end on October 31, January 31, April 30 and July 31. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the heading "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 and in Part II, Item 1A of this Quarterly Report on Form 10-Q. See also "Special Note Regarding Forward-Looking Statements" above.
Overview
Nutanix, Inc. ("we," "us," "our," or "Nutanix") is a global leader in cloud software, offering organizations a single platform for running applications and managing data, anywhere. Our vision is to make hybrid multicloud deployments simple and free customers to focus on achieving their business outcomes. Our mission is to delight customers with an open hybrid multicloud platform with rich data services to run and manage any application, anywhere.
Our Nutanix Cloud Platform is designed to enable organizations to build a hybrid multicloud infrastructure, providing a consistent cloud operating model with a single platform for running applications and managing data in core data centers, at the edge, and in public clouds, all while supporting a variety of hypervisors and container platforms. Nutanix Cloud Platform supports a wide variety of workloads with varied compute, storage, and network requirements, including business-critical applications, data platforms (including SQL and NoSQL databases and business intelligence applications), general-purpose workloads (including system infrastructure, networking, and security), end-user computing and virtual desktop infrastructure services, enterprise artificial intelligence ("AI") workloads (including machine learning and generative AI workloads), and cloud native applications (including modern, containerized applications).
Our business is organized into a single operating and reportable segment. We operate a subscription-based business model, meaning one in which our products, including associated support and entitlement arrangements, are sold with a defined duration.
Our platform typically includes one or more years of support and entitlements, which provides customers with the right to software upgrades and enhancements as well as technical support. Purchases of term-based licenses and SaaS subscriptions have support and entitlements included within the subscription fees and are not sold separately. Purchases of non-portable software are typically accompanied by the purchase of separate support and entitlements.
We had a broad and diverse base of over 27,000 end customers as of October 31, 2024, including approximately 1,060 Global 2000 enterprises. We define the number of end customers as the number of end customers for which we have received an order by the last day of the period, excluding partners to which we have sold products for their own demonstration purposes. A single organization or customer may represent multiple end customers for separate divisions, segments or subsidiaries, and the total number of end customers may contract due to mergers, acquisitions, or other consolidation among existing end customers.
Our solutions are primarily sold through our channel partners or original equipment manufacturers ("OEMs") and delivered directly to our end customers. We have end customers across a broad range of industries, such as automotive, consumer goods, education, energy, financial services, healthcare, manufacturing, media, public sector, retail, technology, and telecommunications. We also sell to service providers, who utilize our platform to provide a variety of cloud-based services to their customers.
We continue to invest in the profitable growth of our business over the long run, including the development of our solutions and investing in sales and marketing to capitalize on our market opportunities, while improving our operating cash flow performance by focusing on creating operational efficiencies throughout our organization, including go-to-market efficiencies, particularly by generating leverage through partnerships. By maintaining this balance, we believe that we can sustain profitable growth.
31
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Key Financial and Performance Metrics
We monitor the following key financial and performance metrics:
|
|
As of and for the |
|
|||||
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands, except percentages and end customer count) |
|
|||||
Total revenue |
|
$ |
511,054 |
|
|
$ |
590,956 |
|
Year-over-year percentage increase |
|
|
17.9 |
% |
|
|
15.6 |
% |
Total billings |
|
$ |
561,133 |
|
|
$ |
591,396 |
|
Annual recurring revenue ("ARR") |
|
$ |
1,663,918 |
|
|
$ |
1,966,105 |
|
Gross profit |
|
$ |
429,095 |
|
|
$ |
508,286 |
|
Non-GAAP gross profit |
|
$ |
439,250 |
|
|
$ |
517,085 |
|
Gross margin |
|
|
84.0 |
% |
|
|
86.0 |
% |
Non-GAAP gross margin |
|
|
85.9 |
% |
|
|
87.5 |
% |
Operating expenses |
|
$ |
434,801 |
|
|
$ |
481,036 |
|
Non-GAAP operating expenses |
|
$ |
359,764 |
|
|
$ |
398,864 |
|
Operating (loss) income |
|
$ |
(5,706 |
) |
|
$ |
27,250 |
|
Non-GAAP operating income |
|
$ |
79,486 |
|
|
$ |
118,221 |
|
Operating margin |
|
|
(1.1 |
)% |
|
|
4.6 |
% |
Non-GAAP operating margin |
|
|
15.6 |
% |
|
|
20.0 |
% |
Net cash provided by operating activities |
|
$ |
145,473 |
|
|
$ |
161,751 |
|
Free cash flow |
|
$ |
132,453 |
|
|
$ |
151,920 |
|
Total end customers (1) |
|
|
24,930 |
|
|
|
27,160 |
|
Disaggregation of Revenue and Billings
The following table depicts the disaggregation of revenue and billings by type, consistent with how we evaluate our financial performance:
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Disaggregation of revenue: |
|
|
|
|
|
|
||
Subscription revenue |
|
$ |
479,478 |
|
|
$ |
560,696 |
|
Professional services revenue |
|
|
22,835 |
|
|
|
27,285 |
|
Other non-subscription product revenue |
|
|
8,741 |
|
|
|
2,975 |
|
Total revenue |
|
$ |
511,054 |
|
|
$ |
590,956 |
|
Disaggregation of billings: |
|
|
|
|
|
|
||
Subscription billings |
|
$ |
528,914 |
|
|
$ |
564,292 |
|
Professional services billings |
|
|
23,478 |
|
|
|
24,129 |
|
Other non-subscription product billings |
|
|
8,741 |
|
|
|
2,975 |
|
Total billings |
|
$ |
561,133 |
|
|
$ |
591,396 |
|
32
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Subscription revenue — Subscription revenue includes any performance obligation which has a defined term and is generated from the sales of software entitlement and support subscriptions, subscription software licenses and cloud-based SaaS offerings.
Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed.
Other non-subscription product revenue — Other non-subscription product revenue includes approximately $8.1 million of non-portable software revenue for the three months ended October 31, 2023, $1.9 million of non-portable software revenue for the three months ended October 31, 2024, $0.6 million of hardware revenue for the three months ended October 31, 2023, and $1.1 million of hardware revenue for the three months ended October 31, 2024.
Non-GAAP Financial Measures and Key Performance Measures
We regularly monitor total billings, ARR, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, free cash flow, and total end customers, which are non-GAAP financial measures and key performance measures, to help us evaluate our growth and operational efficiencies, measure our performance, identify trends in our sales activity and establish our budgets. We evaluate these measures because they:
33
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Total billings is a performance measure which we believe provides useful information to our management and investors, as it represents the dollar value under binding purchase orders received and billed during a given period. ARR is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the top-line growth of our subscription business because it takes into account variability in term lengths. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), and non-GAAP operating margin are performance measures which we believe provide useful information to investors, as they provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures, such as stock-based compensation expense, that may not be indicative of our ongoing core business operating results. Free cash flow is a performance measure that we believe provides useful information to management and investors about the amount of cash generated by the business after capital expenditures. We use these non-GAAP financial and key performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons.
Total billings, ARR, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, and free cash flow have limitations as analytical tools and they should not be considered in isolation or as substitutes for analysis of our results as reported under generally accepted accounting principles ("GAAP") in the United States. Total billings, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, and free cash flow are not substitutes for total revenue, gross profit, gross margin, operating expenses, operating income (loss), operating margin, or net cash provided by (used in) operating activities, respectively. There is no GAAP measure that is comparable to ARR, so we have not reconciled ARR numbers included in this Quarterly Report on Form 10-Q to any GAAP measure. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures and key performance measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures and key performance measures as tools for comparison. We urge you to review the reconciliation of our non-GAAP financial measures and key performance measures to the most directly comparable GAAP financial measures included below and not to rely on any single financial measure to evaluate our business.
We calculate our non-GAAP financial and key performance measures as follows:
Total billings — We calculate total billings by taking the change in deferred revenue less the change in unbilled accounts receivable between the start and end of the period and adding that to total revenue recognized in the same period.
ARR — We calculate ARR as the sum of annual contract value ("ACV") for all subscription contracts in effect as of the end of the period. For the purposes of this calculation, we assume that the contract term begins on the date a contract is booked, unless the terms of such contract prevent us from fulfilling our obligations until a later period, and irrespective of the periods in which we would recognize revenue for such contract. ARR excludes all life-of-device contracts. We define ACV as the total annualized value of a contract, excluding amounts related to professional services and hardware. We calculate the total annualized value for a contract by dividing the total value of the contract by the number of years in the term of such contract.
Non-GAAP gross profit and Non-GAAP gross margin — We calculate non-GAAP gross margin as non-GAAP gross profit divided by total revenue. We define non-GAAP gross profit as gross profit adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, and costs associated with certain other non-recurring transactions. Our presentation of non-GAAP gross profit and non-GAAP gross margin should not be construed as implying that our future results will not be affected by any recurring expenses or any unusual or non-recurring items that we exclude from our calculation of these non-GAAP financial measures.
Non-GAAP operating expenses — We define non-GAAP operating expenses as total operating expenses adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, litigation settlement accruals and legal fees related to certain non-ordinary course litigation matters, and costs associated with certain other non-recurring transactions. Our presentation of non-GAAP operating expenses should not be construed as implying that our future results will not be affected by any recurring expenses or any unusual or non-recurring items that we exclude from our calculation of this non-GAAP financial measure.
34
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Non-GAAP operating income (loss) and Non-GAAP operating margin — We calculate non-GAAP operating margin as non-GAAP operating income (loss) divided by total revenue. We define non-GAAP operating income (loss) as operating income (loss) adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, litigation settlement accruals and legal fees related to certain non-ordinary course litigation matters, and costs associated with certain other non-recurring transactions. Our presentation of non-GAAP operating income (loss) and non-GAAP operating margin should not be construed as implying that our future results will not be affected by any recurring expenses or any unusual or non-recurring items that we exclude from our calculation of these non-GAAP financial measures.
Free cash flow — We calculate free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment, which measures our ability to generate cash from our business operations after our capital expenditures.
Total end customers — We define the number of end customers as the number of end customers for which we have received an order by the last day of the period, excluding partners to which we have sold products for their own demonstration purposes. A single organization or customer may represent multiple end customers for separate divisions, segments, or subsidiaries, and the total number of end customers may contract due to mergers, acquisitions, or other consolidation among existing end customers.
35
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
The following table presents a reconciliation of total billings, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, and free cash flow to the most directly comparable GAAP financial measures, for each of the periods indicated:
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands, except percentages) |
|
|||||
Total revenue |
|
$ |
511,054 |
|
|
$ |
590,956 |
|
Change in deferred revenue |
|
|
50,079 |
|
|
|
440 |
|
Total billings (non-GAAP) |
|
$ |
561,133 |
|
|
$ |
591,396 |
|
|
|
|
|
|
|
|
||
Gross profit |
|
$ |
429,095 |
|
|
$ |
508,286 |
|
Stock-based compensation |
|
|
9,044 |
|
|
|
8,032 |
|
Amortization of intangible assets |
|
|
1,111 |
|
|
|
767 |
|
Non-GAAP gross profit |
|
$ |
439,250 |
|
|
$ |
517,085 |
|
|
|
|
|
|
|
|
||
Gross margin |
|
|
84.0 |
% |
|
|
86.0 |
% |
Stock-based compensation |
|
|
1.7 |
% |
|
|
1.4 |
% |
Amortization of intangible assets |
|
|
0.2 |
% |
|
|
0.1 |
% |
Non-GAAP gross margin |
|
|
85.9 |
% |
|
|
87.5 |
% |
|
|
|
|
|
|
|
||
Operating expenses |
|
$ |
434,801 |
|
|
$ |
481,036 |
|
Stock-based compensation |
|
|
(74,954 |
) |
|
|
(80,717 |
) |
Amortization of intangible assets |
|
|
(37 |
) |
|
|
(88 |
) |
Litigation settlement accrual and legal fees |
|
|
(46 |
) |
|
|
(1,367 |
) |
Non-GAAP operating expenses |
|
$ |
359,764 |
|
|
$ |
398,864 |
|
|
|
|
|
|
|
|
||
(Loss) income from operations |
|
$ |
(5,706 |
) |
|
$ |
27,250 |
|
Stock-based compensation |
|
|
83,998 |
|
|
|
88,749 |
|
Amortization of intangible assets |
|
|
1,148 |
|
|
|
855 |
|
Litigation settlement accrual and legal fees |
|
|
46 |
|
|
|
1,367 |
|
Non-GAAP income from operations |
|
$ |
79,486 |
|
|
$ |
118,221 |
|
|
|
|
|
|
|
|
||
Operating margin |
|
|
(1.1 |
)% |
|
|
4.6 |
% |
Stock-based compensation |
|
|
16.5 |
% |
|
|
15.1 |
% |
Amortization of intangible assets |
|
|
0.2 |
% |
|
|
0.1 |
% |
Litigation settlement accrual and legal fees |
|
|
— |
|
|
|
0.2 |
% |
Non-GAAP operating margin |
|
|
15.6 |
% |
|
|
20.0 |
% |
|
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
$ |
145,473 |
|
|
$ |
161,751 |
|
Purchases of property and equipment |
|
|
(13,020 |
) |
|
|
(9,831 |
) |
Free cash flow (non-GAAP) |
|
$ |
132,453 |
|
|
$ |
151,920 |
|
Factors Affecting Our Performance
We believe that our future success will depend on many factors, including those described below. While these areas present significant opportunity, they also present risks that we must manage to achieve successful results. See the section titled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 and the section titled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q for details. If we are unable to address these challenges, our business and operating results could be materially and adversely affected.
Investment in Profitable Growth
We continue to invest in our growth over the long run, while improving our operating cash flow performance by focusing on creating operational efficiencies throughout our organization, including go-to-market efficiencies, particularly by generating leverage through partnerships. By maintaining this balance, we believe we can sustain profitable growth.
36
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Investment in Sales and Marketing – Our ability to drive top-line growth depends, in large part, on our ability to capitalize on our market opportunity, including our ability to recruit, train and retain sufficient numbers of ramped sales personnel to support our growth. As part of our investment in our growth over the long run, we plan to invest in sales and marketing, including investing in our sales and marketing teams and continuing our focus on opportunities with major accounts, large deals, and commercial accounts, as well as other sales and marketing initiatives to increase our pipeline growth. As we continue to recruit additional sales representatives, it will take time to train and ramp them to full productivity. As a result, we expect that our overall sales and marketing expense will increase in the near term. We estimate, based on past experience, that our average sales team members typically become fully ramped up around the start of their fourth quarter of employment with us, and as our newer employees ramp up, we expect their increased productivity to contribute to our revenue growth. As of October 31, 2024, we considered approximately 74% of our global sales team members to be fully ramped, while the remaining approximately 26% of our global sales team members are in the process of ramping up. As we continue to focus some of our newer and existing sales team members on major accounts and large deals, and as we operate our subscription-based business model, it may take longer, potentially significantly, for these sales team members to become fully productive, and there may also be an impact to the overall productivity of our sales team. As part of our overall efforts to improve our free cash flow performance, we have also proactively taken steps to increase our go-to-market productivity and over time, we intend to reduce our overall sales and marketing spend as a percentage of revenue. These measures include improving the efficiency of our demand generation spend, focusing on lower cost renewals, increasing leverage of our channel partners and OEMs, including supporting new OEMs, and optimizing headcount in geographies based on market opportunities.
Investment in Research and Development and Engineering – We also intend, in the long term, to grow our global research and development and engineering teams to enhance our solutions, including our newer subscription-based products, improve integration with new and existing ecosystem partners and broaden the range of technologies and features available through our platform. We continue to invest in our growth by strengthening our core offerings, investing in our solution ecosystem, and taking advantage of emerging opportunities around generative AI and modern applications across hybrid and mutlicloud environments.
We believe that these investments will contribute to our long-term growth, although they may adversely affect our profitability in the near term.
Our Subscription-Based Business Model
We operate a subscription-based business model to provide our customers with the flexibility to choose their preferred license levels and durations based on their specific business needs. A subscription-based business model means one in which our products, including associated support and entitlement arrangements, are sold with a defined duration. Subscription-based sales consist of subscription term-based licenses and offerings with ongoing performance obligations, including software entitlement and support subscriptions and cloud-based SaaS offerings. Revenue from subscription term-based licenses is generally recognized upfront upon transfer of control to the customer, which happens when we make the software available to the customer. Accordingly, any decline in average contract durations associated with our subscription term-based licenses would negatively impact our top-line results. Revenue from software entitlement and support subscription and cloud-based SaaS offerings is recognized ratably over the contractual service period. Accordingly, any decline in new or renewed subscriptions in any one fiscal quarter may not be fully or immediately reflected in our revenue for that fiscal quarter. For additional information on revenue recognition, see Note 2 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Market Adoption of Our Products
Hybrid and multicloud paradigms, as well as trends in generative AI and modern applications, have affected IT buyer expectations about the simplicity, agility, scalability, portability and pay-as-you-grow economics of IT resources. A key focus of our sales and marketing efforts is creating market awareness about the benefits of our platform. This includes our newer products outside of our core hyperconverged infrastructure offering, both as compared to traditional data center architectures, as well as the public cloud, particularly as we continue to pursue large enterprises and mission critical workloads. Our business and operating results will be significantly affected by the degree to and speed with which organizations adopt our platform.
37
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Leveraging Partners
We plan to continue to leverage our relationships with our channel and OEM partners and expand our network of cloud and ecosystem partners, all of which help to drive the adoption and sale of our solutions with our end customers. We sell our solutions primarily through our partners, and our solutions primarily run on hardware platforms that our customers often choose to purchase from our channel or OEM partners. We believe that increasing channel leverage, particularly as we expand our focus on opportunities in commercial accounts, by investing in sales enablement and co-marketing with our channel and OEM partners in the long term will extend and improve our engagement with a broad set of end customers. Our reliance on manufacturers, including our channel and OEM partners, to produce the hardware platforms on which our software runs exposes us to supply chain delays, which could impair our ability to provide services to end customers in a timely manner. Our business and results of operations will be significantly affected by our success in leveraging our relationships with our channel and OEM partners and expanding our network of cloud and ecosystem partners.
Customer Acquisition, Retention and Expansion
Our business and operating results will depend on our ability to obtain new end customers and retain and sell additional solutions to our existing base of end customers. Our ability to obtain new end customers and retain and sell additional solutions to existing customers will in turn depend in part on a number of factors. These factors include our ability to: execute on our business plans, vision, and objectives (including our growth and go-to-market strategies), respond to competitive pressures, effectively maintain existing and future customer relationships, continue to innovate by adding new functionality and improving usability of our solutions in a manner that addresses our end customers’ needs and requirements, and optimally price our solutions in light of marketplace conditions, our ability to respond to competitive pressures, manage our costs, and anticipate and manage customer demand. Furthermore, our subscription-based business model and product transitions may cause concerns among our customer base, including concerns regarding changes to pricing over time, and may also result in confusion among new and existing end customers, for example, regarding our pricing models. Such concerns and/or confusion can slow adoption and renewal rates among our current and future customer base.
Our end customers typically deploy our technology for a specific workload initially. After a new end customer's initial order, which includes the product and associated software entitlement and support subscription and services, we focus on expanding our footprint by serving more workloads. We also generate recurring revenue from our software entitlement and support subscription renewals, and given our subscription-focused business model, software and support renewals are having an increasing significance for our future revenue streams as existing subscriptions come up for renewal. We view continued purchases and upgrades as critical drivers of our success. As of October 31, 2024, approximately 76% of our end customers who have been with us for 18 months or longer have made a repeat purchase, which is defined as any purchase activity, including renewals of term-based licenses or software entitlement and support subscription renewals, after the initial purchase. Additionally, end customers who have been with us for 18 months or longer have total lifetime orders, including the initial order, in an amount that is more than 8.9x greater, on average, than their initial order. This number increases to approximately 35.4x, on average, for Global 2000 end customers who have been with us for 18 months or longer as of October 31, 2024. These multiples exclude the effect of one end customer who had a very large and irregular purchase pattern that we believe is not representative of the purchase patterns of all of our other end customers.
More recently, our sales pipeline has evolved to include a higher mix of larger deal opportunities, which often take longer to close and require more levels of review from the customer's executive team, involve greater competition, and have greater variability in timing, outcome and deal structure. We have also seen a modest elongation of average sales cycles compared to historical levels, which we believe is influenced by the macroeconomic environment and continued increased scrutiny on spend. These trends are expected to drive greater variability in our ability to land new customers and expand sales to existing customers, and our top-line results may be adversely affected.
38
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Components of Our Results of Operations
Revenue
We generate revenue primarily from the sale of our Nutanix Cloud Platform, sold primarily as subscription term-based licenses, and which can be deployed on a variety of qualified hardware platforms or, in the case of our cloud-based SaaS offerings, via hosted service or delivered pre-installed on a server that is configured to order. Non-portable software licenses are delivered or sold alongside configured-to-order servers and can be used over the life of the associated server.
Our subscription term-based licenses are sold separately, or can be sold alongside configured-to-order servers. Our subscription term-based licenses typically have a term of one to five years. Our cloud-based SaaS subscriptions have terms extending up to five years.
Our customers generally purchase their qualified hardware platforms for deployment of our software from one of our channel partners or OEMs. Our platform typically includes one or more years of support and entitlements, which provides customers with the right to software upgrades and enhancements as well as technical support. Our platform is primarily sold through channel partners and OEMs. Revenue is recognized net of sales tax and withholding tax.
Product revenue — Product revenue primarily consists of software revenue. A majority of our product revenue is generated from the sale of our Nutanix Cloud Platform. We also sell renewals of previously purchased software licenses and SaaS offerings. Revenue from our software products is generally recognized upon transfer of control to the customer, which is typically upon shipment for sales including a server from a partner, upon making the software available to the customer when not sold with a server, or as services are performed with SaaS offerings. In the infrequent transactions where the hardware is purchased directly from Nutanix, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis.
Support, entitlements and other services revenue — We generate our support, entitlements and other services revenue primarily from software entitlement and support subscriptions, which include the right to software upgrades and enhancements as well as technical support. The majority of our product sales are sold in conjunction with software entitlement and support subscriptions, with terms ranging from one to five years. Occasionally, we also sell professional services with our products. We recognize revenue from software entitlement and support contracts ratably over the contractual service period, which typically commences upon transfer of control of the corresponding products to the customer. We recognize revenue related to professional services as they are performed.
Cost of Revenue
Cost of product revenue — Cost of product revenue consists of costs paid to OEM partners, hardware costs, personnel costs associated with our operations function, consisting of salaries, benefits, bonuses and stock-based compensation, cloud-based costs associated with our SaaS offerings, and allocated costs. Allocated costs consist of certain facilities, depreciation and amortization, recruiting and information technology costs that are allocated based on headcount.
Cost of support, entitlements and other services revenue — Cost of support, entitlements and other services revenue includes personnel and operating costs associated with our global customer support organization, as well as allocated costs. We expect our cost of support, entitlements and other services revenue to increase in absolute dollars as our support, entitlements and other services revenue increases.
Operating Expenses
Our operating expenses consist of sales and marketing, research and development and general and administrative expenses. The largest component of our operating expenses is personnel costs. Personnel costs consist of wages, benefits, bonuses and, with respect to sales and marketing expenses, sales commissions.
39
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Sales and marketing — Sales and marketing expense consists primarily of personnel costs, including sales commissions. Sales and marketing expense also includes costs for promotional activities and other marketing costs, travel expenses, costs associated with demonstration units, including depreciation, and allocated costs. Commissions are deferred and recognized as we recognize the associated revenue. We expect sales and marketing expense to continue, in the long term, to increase in absolute dollars as part of our long-term plans to invest in our growth. However, as part of our overall efforts to improve our operating cash flow performance, we have also proactively taken steps to increase our go-to-market productivity and over time, we intend to reduce our overall sales and marketing spend as a percentage of revenue. As we continue to recruit additional sales representatives, it will take time to train and ramp them to full productivity. As a result, our sales and marketing expense may fluctuate.
Research and development — Research and development ("R&D") expense consists primarily of personnel costs, as well as other direct and allocated costs. We have devoted our product development efforts primarily to enhancing the functionality and expanding the capabilities of our solutions. R&D costs are expensed as incurred, unless they meet the criteria for capitalization. We expect R&D expense, in the long term, to increase in absolute dollars as part of our long-term plans to invest in our future products and services, including our newer subscription-based products, although R&D expense may fluctuate as a percentage of total revenue and, on an absolute basis, from quarter to quarter.
General and administrative — General and administrative ("G&A") expense consists primarily of personnel costs, which include our executive, finance, human resources and legal organizations. G&A expense also includes outside professional services, which consists primarily of legal, accounting and other consulting costs, as well as insurance and other costs associated with being a public company and allocated costs. We expect G&A expense, in the long term, to increase in absolute dollars, particularly due to additional legal, accounting, insurance and other costs associated with our growth, although G&A expense may fluctuate as a percentage of total revenue and, on an absolute basis, from quarter to quarter.
Other Income (Expense), Net
Other income (expense), net consists primarily of interest income and expense, which includes the amortization of the debt discount and debt issuance costs associated with our previously outstanding 2.50% convertible senior notes due 2026 (the "2026 Notes") and our outstanding 0.25% convertible senior notes due 2027 (the "2027 Notes"), non-cash interest expense on the 2026 Notes, interest expense related to the conversion of the 2026 Notes in full, the amortization of the debt discount on the 2026 Notes, interest expense on the 2027 Notes, interest income related to our short-term investments, and foreign currency exchange gains or losses.
Provision for Income Taxes
Provision for income taxes consists primarily of income taxes for certain foreign jurisdictions in which we conduct business and federal and state income taxes in the United States. We have recorded a full valuation allowance related to our federal and state net operating losses and other net deferred tax assets and a partial valuation allowance related to certain foreign net operating losses due to the uncertainty of the ultimate realization of the future benefits of those assets. Beginning in fiscal 2023, provisions in the U.S. Tax Cuts and Jobs Act of 2017 required us to capitalize and amortize R&D expenditures rather than deducting the costs as incurred. The capitalization of R&D resulted in U.S. taxable income for the fiscal 2025, which was partially offset by net operating loss carryforwards.
40
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Results of Operations
The following tables set forth our condensed consolidated results of operations in dollars and as a percentage of total revenue for the periods presented. The period-to-period comparison of results is not necessarily indicative of results for future periods.
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Revenue: |
|
|
|
|
|
|
||
Product |
|
$ |
246,922 |
|
|
$ |
301,919 |
|
Support, entitlements and other services |
|
|
264,132 |
|
|
|
289,037 |
|
Total revenue |
|
|
511,054 |
|
|
|
590,956 |
|
Cost of revenue: |
|
|
|
|
|
|
||
Product (1)(2) |
|
|
10,234 |
|
|
|
8,370 |
|
Support, entitlements and other services (1) |
|
|
71,725 |
|
|
|
74,300 |
|
Total cost of revenue |
|
|
81,959 |
|
|
|
82,670 |
|
Gross profit |
|
|
429,095 |
|
|
|
508,286 |
|
Operating expenses: |
|
|
|
|
|
|
||
Sales and marketing (1)(2) |
|
|
235,323 |
|
|
|
253,401 |
|
Research and development (1) |
|
|
151,975 |
|
|
|
173,959 |
|
General and administrative (1) |
|
|
47,503 |
|
|
|
53,676 |
|
Total operating expenses |
|
|
434,801 |
|
|
|
481,036 |
|
(Loss) income from operations |
|
|
(5,706 |
) |
|
|
27,250 |
|
Other (expense) income, net |
|
|
(5,275 |
) |
|
|
9,573 |
|
(Loss) income before provision for income taxes |
|
|
(10,981 |
) |
|
|
36,823 |
|
Provision for income taxes |
|
|
4,872 |
|
|
|
6,897 |
|
Net (loss) income |
|
$ |
(15,853 |
) |
|
$ |
29,926 |
|
|
|
|
|
|
|
|
||
(1) Includes stock-based compensation expense as |
|
|
|
|
|
|
||
Product cost of revenue |
|
$ |
1,928 |
|
|
$ |
1,212 |
|
Support, entitlements and other services cost of revenue |
|
|
7,116 |
|
|
|
6,820 |
|
Sales and marketing |
|
|
21,471 |
|
|
|
20,648 |
|
Research and development |
|
|
38,404 |
|
|
|
43,562 |
|
General and administrative |
|
|
15,079 |
|
|
|
16,507 |
|
Total stock-based compensation expense |
|
$ |
83,998 |
|
|
$ |
88,749 |
|
|
|
|
|
|
|
|
||
(2) Includes amortization of intangible assets as follows: |
|
|
|
|
|
|
||
Product cost of revenue |
|
$ |
1,111 |
|
|
$ |
767 |
|
Sales and marketing |
|
|
37 |
|
|
|
88 |
|
Total amortization of intangible assets |
|
$ |
1,148 |
|
|
$ |
855 |
|
41
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(as a percentage of total revenue) |
|
|||||
Revenue: |
|
|
|
|
|
|
||
Product |
|
|
48.3 |
% |
|
|
51.1 |
% |
Support, entitlements and other services |
|
|
51.7 |
% |
|
|
48.9 |
% |
Total revenue |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of revenue: |
|
|
|
|
|
|
||
Product |
|
|
2.0 |
% |
|
|
1.4 |
% |
Support, entitlements and other services |
|
|
14.0 |
% |
|
|
12.6 |
% |
Total cost of revenue |
|
|
16.0 |
% |
|
|
14.0 |
% |
Gross profit |
|
|
84.0 |
% |
|
|
86.0 |
% |
Operating expenses: |
|
|
|
|
|
|
||
Sales and marketing |
|
|
46.0 |
% |
|
|
42.9 |
% |
Research and development |
|
|
29.7 |
% |
|
|
29.4 |
% |
General and administrative |
|
|
9.3 |
% |
|
|
9.1 |
% |
Total operating expenses |
|
|
85.0 |
% |
|
|
81.4 |
% |
(Loss) income from operations |
|
|
(1.0 |
)% |
|
|
4.6 |
% |
Other (expense) income, net |
|
|
(1.0 |
)% |
|
|
1.6 |
% |
(Loss) income before provision for income taxes |
|
|
(2.0 |
)% |
|
|
6.2 |
% |
Provision for income taxes |
|
|
1.0 |
% |
|
|
1.2 |
% |
Net (loss) income |
|
|
(3.0 |
)% |
|
|
5.0 |
% |
42
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Comparison of the Three Months Ended October 31, 2023 and 2024
Revenue
|
|
Three Months Ended |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Product |
|
$ |
246,922 |
|
|
$ |
301,919 |
|
|
$ |
54,997 |
|
|
|
22 |
% |
Support, entitlements |
|
|
264,132 |
|
|
|
289,037 |
|
|
|
24,905 |
|
|
|
9 |
% |
Total revenue |
|
$ |
511,054 |
|
|
$ |
590,956 |
|
|
$ |
79,902 |
|
|
|
16 |
% |
|
|
Three Months Ended |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
U.S. |
|
$ |
290,274 |
|
|
$ |
332,728 |
|
|
$ |
42,454 |
|
|
|
15 |
% |
Europe, the Middle |
|
|
124,584 |
|
|
|
151,191 |
|
|
|
26,607 |
|
|
|
21 |
% |
Asia Pacific |
|
|
83,112 |
|
|
|
95,819 |
|
|
|
12,707 |
|
|
|
15 |
% |
Other Americas |
|
|
13,084 |
|
|
|
11,218 |
|
|
|
(1,866 |
) |
|
|
(14 |
)% |
Total revenue |
|
$ |
511,054 |
|
|
$ |
590,956 |
|
|
$ |
79,902 |
|
|
|
16 |
% |
The increase in product revenue for the three months ended October 31, 2024, as compared to the prior year period, was due primarily to increases in software revenue resulting from an increased adoption of our products, as well as growth in software renewals. Specifically, we saw growth in term-based license revenue, which increased by 27% from the prior year period. For the three months ended October 31, 2023, the total average contract duration was approximately 2.9 years. For the three months ended October 31, 2024, the total average contract duration was approximately 3.1 years. Total average contract duration represents the dollar-weighted term across all subscription contracts, as well as our limited number of life-of-device contracts billed during the period, using an assumed term of five years for licenses without a specified term, such as life-of-device licenses.
Support, entitlements and other services revenue increased for the three months ended October 31, 2024, as compared to the prior year period, in conjunction with the growth of our end customer base and the related software entitlement and support subscription contracts and renewals.
Cost of Revenue and Gross Margin
|
|
Three Months Ended |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Cost of product revenue |
|
$ |
10,234 |
|
|
$ |
8,370 |
|
|
$ |
(1,864 |
) |
|
|
(18 |
)% |
Product gross margin |
|
|
95.9 |
% |
|
|
97.2 |
% |
|
|
|
|
|
|
||
Cost of support, |
|
$ |
71,725 |
|
|
$ |
74,300 |
|
|
$ |
2,575 |
|
|
|
4 |
% |
Support, entitlements |
|
|
72.8 |
% |
|
|
74.3 |
% |
|
|
|
|
|
|
||
Total gross margin |
|
|
84.0 |
% |
|
|
86.0 |
% |
|
|
|
|
|
|
||
Cost of product revenue
Cost of product revenue decreased for the three months ended October 31, 2024, as compared to the prior year period, due primarily to decreases in overhead resulting from lower software license and support costs, as well as lower stock-based compensation expense. Slight fluctuations in hardware revenue and cost of product revenue are anticipated, as we expect to continue selling small amounts of hardware for the foreseeable future.
Product gross margin increased by 1.3 percentage points for the three months ended October 31, 2024, as compared to the prior year period, due primarily to product revenue increasing while cost of product revenue decreased.
43
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Cost of support, entitlements and other services revenue
Cost of support, entitlements and other services revenue increased for the three months ended October 31, 2024, as compared to the prior year period, due primarily to higher outside services and personnel-related costs, resulting from growth in our global customer support organization.
Support, entitlements and other services gross margin increased by 1.5 percentage points for the three months ended October 31, 2024, respectively, as compared to the prior year period, due primarily to support, entitlements and other services revenue growing at a higher rate than personnel-related costs.
Operating Expenses
Sales and marketing
|
|
Three Months Ended |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Sales and marketing |
|
$ |
235,323 |
|
|
$ |
253,401 |
|
|
$ |
18,078 |
|
|
|
8 |
% |
Percent of total revenue |
|
|
46.0 |
% |
|
|
42.9 |
% |
|
|
|
|
|
|
||
Sales and marketing expense increased for the three months ended October 31, 2024, as compared to the prior year period, due primarily to higher personnel-related costs, including commissions expense, resulting from the 8% growth in our sales and marketing headcount from October 31, 2023 to October 31, 2024.
Research and development
|
|
Three Months Ended |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Research and development |
|
$ |
151,975 |
|
|
$ |
173,959 |
|
|
$ |
21,984 |
|
|
|
14 |
% |
Percent of total revenue |
|
|
29.7 |
% |
|
|
29.4 |
% |
|
|
|
|
|
|
||
Research and development expense increased for the three months ended October 31, 2024, as compared to the prior year period, due primarily to higher personnel-related costs, including stock-based compensation expense, resulting from the 13% growth in our R&D headcount from October 31, 2023 to October 31, 2024, partially offset by decreases in technical costs related to certain partner programs.
General and administrative
|
|
Three Months Ended |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
General and administrative |
|
$ |
47,503 |
|
|
$ |
53,676 |
|
|
$ |
6,173 |
|
|
|
13 |
% |
Percent of total revenue |
|
|
9.3 |
% |
|
|
9.1 |
% |
|
|
|
|
|
|
||
General and administrative expense increased for the three months ended October 31, 2024, as compared to the prior year period, due primarily to higher personnel-related costs, including stock-based compensation expense, resulting from the 13% growth in our G&A headcount from October 31, 2023 to October 31, 2024, as well as an increase in technical costs related to software licenses.
44
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Other (Expense) Income, Net
|
|
Three Months Ended |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Interest income, net |
|
$ |
15,386 |
|
|
$ |
11,094 |
|
|
$ |
4,292 |
|
|
|
28 |
% |
Amortization of debt |
|
|
(16,347 |
) |
|
|
(745 |
) |
|
|
(15,602 |
) |
|
|
(95 |
)% |
Other |
|
|
(4,314 |
) |
|
|
(776 |
) |
|
|
(3,538 |
) |
|
|
(82 |
)% |
Other (expense) income, net |
|
$ |
(5,275 |
) |
|
$ |
9,573 |
|
|
$ |
(14,848 |
) |
|
|
(281 |
)% |
Other (expense) income, net decreased for the three months ended October 31, 2024, as compared to the prior year periods, due primarily to a decrease in interest expense related to our convertible notes, as the 2026 Notes were converted during the fiscal quarter ended July 31, 2024, as well as a decrease in foreign exchange losses, partially offset by decreases in interest income on our investments.
Provision for Income Taxes
|
|
Three Months Ended |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Provision for income taxes |
|
$ |
4,872 |
|
|
$ |
6,897 |
|
|
$ |
2,025 |
|
|
|
42 |
% |
The increase in the income tax provision for the three months ended October 31, 2024, as compared to the prior year period, was due primarily to an increase in our U.S. taxable income and higher foreign taxes as a result of higher taxable earnings in foreign jurisdictions, partially offset by excess tax benefits on stock options and restricted stock units.
Liquidity and Capital Resources
Our principal sources of liquidity were cash, cash equivalents, and marketable securities and net accounts receivable. As of October 31, 2024, we had $716.6 million of cash and cash equivalents, $0.4 million of restricted cash and $358.8 million of short-term investments, which were held for general corporate purposes. Our cash, cash equivalents and short-term investments primarily consist of bank deposits, money market accounts and highly rated debt instruments of the U.S. government and its agencies and debt instruments of highly rated corporations. As of October 31, 2024, we had accounts receivable of $198.6 million, net of allowances of $0.9 million.
In September 2020, we issued $750.0 million in aggregate principal amount of 2.50% convertible senior notes due 2026 to BCPE Nucleon (DE) SPV, LP, an entity affiliated with Bain Capital, LP. On June 6, 2024, BCPE Nucleon (DE) SPV, LP delivered a notice of conversion to convert $817.6 million aggregate principal amount of the 2026 Notes, representing all of the outstanding principal amount of the 2026 Notes. During the fiscal quarter ended July 31, 2024, we settled the conversion by paying $817.6 million in cash and delivering approximately 16.9 million shares of Class A common stock. For additional information, see Note 5 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
In September 2021, we issued convertible senior notes with a 0.25% interest rate for an aggregate principal amount of $575.0 million due 2027, of which $477.3 million in principal amount was issued in exchange for approximately $416.5 million principal amount of the 2023 Notes and the remaining $97.7 million in principal amount was issued for cash. There are no required principal payments on the 2027 Notes prior to their maturity. For additional information, see Note 5 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
45
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
We believe that our cash, cash equivalents and short-term investments and our expected net cash provided by operating activities will be sufficient to meet our anticipated cash needs for working capital, capital expenditures, and share repurchases (if any) for at least the next 12 months. We may, from time to time, evaluate market conditions, our liquidity profile, and various financing alternatives (including debt or equity financing) for opportunities to enhance our capital structure. Our future cash needs will depend on many factors, including our growth strategy and plans, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced product and service offerings, the continuing market acceptance of our products, our end customers and partners, and market, economic and financial conditions (including inflation and interest rates). In addition, if the conditional conversion feature of the 2027 Notes is triggered prior to their October 1, 2027 maturity date, holders of the 2027 Notes will be entitled to convert the 2027 Notes at their option. If one or more holders elect to convert their 2027 Notes, we may elect to satisfy our conversion obligation by delivering shares of our Class A common stock or a combination of cash and shares of Class A common stock, rather than exclusively in cash.
Capital Return
In August 2023, our Board of Directors authorized the repurchase of up to $350.0 million of our Class A common stock. Repurchases will be funded from available working capital and may be made at management’s discretion from time to time. The authorization has no fixed expiration date and does not obligate us to repurchase any specified number or dollar value of shares. The program may be modified, suspended or discontinued at any time. For more information on the share repurchase program, refer to Note 8 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Cash Flows
The following table summarizes our cash flows for the periods presented:
|
|
Three Months Ended October 31, |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Net cash provided by operating activities |
|
$ |
145,473 |
|
|
$ |
161,751 |
|
Net cash used in investing activities |
|
|
(42,218 |
) |
|
|
(28,194 |
) |
Net cash used in financing activities |
|
|
(4,367 |
) |
|
|
(72,225 |
) |
Net increase in cash, cash equivalents and restricted cash |
|
$ |
98,888 |
|
|
$ |
61,332 |
|
Cash Flows from Operating Activities
Net cash provided by operating activities was $161.8 million for the three months ended October 31, 2024, compared to $145.5 million for the three months ended October 31, 2023. The increase in cash provided by operating activities for the three months ended October 31, 2024 was due primarily to the increase in our net income from operations.
Cash Flows from Investing Activities
Net cash used in investing activities of $42.2 million for the three months ended October 31, 2023 included $278.2 million of short-term investment purchases and $13.0 million of purchases of property and equipment, partially offset by $249.0 million of maturities of short-term investments.
Net cash used in investing activities of $28.2 million for the three months ended October 31, 2024 included $110.0 million of short-term investment purchases and $9.8 million of purchases of property and equipment, partially offset by $91.6 million of maturities of short-term investments.
Cash Flows from Financing Activities
Net cash used in financing activities of $4.4 million for the three months ended October 31, 2023 included $17.5 million of repurchases of our Class A common stock and $0.6 million of payments for finance lease obligations, partially offset by $13.8 million of proceeds from the sale of shares through employee equity incentive plans.
46
NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Net cash used in financing activities of $72.2 million for the three months ended October 31, 2024 included $79.3 million of taxes paid related to the net share settlement of equity awards, $20.1 million of repurchases of our Class A common stock, and $1.0 million of payments for finance lease obligations, partially offset by $28.1 million of proceeds from the sale of shares through employee equity incentive plans.
Material Cash Requirements and Other Obligations
The following table summarizes our material cash requirements and other obligations as of October 31, 2024:
|
|
Payments Due by Period |
|
|||||||||||||||||
|
|
Total |
|
|
Less than |
|
|
1 Year to |
|
|
3 to |
|
|
More than |
|
|||||
|
|
(in thousands) |
|
|||||||||||||||||
Principal amount payable on convertible senior notes (1) |
|
$ |
575,116 |
|
|
$ |
116 |
|
|
$ |
575,000 |
|
|
$ |
— |
|
|
$ |
— |
|
Operating leases (undiscounted basis) (2) |
|
|
164,451 |
|
|
|
32,379 |
|
|
|
60,691 |
|
|
|
57,124 |
|
|
|
14,257 |
|
Other commitments (3) |
|
|
135,807 |
|
|
|
129,042 |
|
|
|
6,013 |
|
|
|
752 |
|
|
|
— |
|
Guarantees with contract manufacturers |
|
|
80,062 |
|
|
|
80,062 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
955,436 |
|
|
$ |
241,599 |
|
|
$ |
641,704 |
|
|
$ |
57,876 |
|
|
$ |
14,257 |
|
From time to time, in the normal course of business, we make commitments with our contract manufacturers to ensure them a minimum level of financial consideration for their investment in our joint solutions. These commitments are based on revenue targets or on-hand inventory and non-cancelable purchase orders for non-standard components. We record a charge related to these items when we determine that it is probable a loss will be incurred and we are able to estimate the amount of the loss. Our historical charges have not been material.
As of October 31, 2024, we had accrued liabilities related to uncertain tax positions, which are reflected on our condensed consolidated balance sheet. These accrued liabilities are not reflected in the contractual obligations disclosed in the table above, as it is uncertain if or when such amounts will ultimately be settled.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the applicable periods. We evaluate our estimates, assumptions and judgments on an ongoing basis. Our estimates, assumptions and judgments are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our condensed consolidated financial statements, which, in turn, could change the results from those reported.
There have been no material changes to our critical accounting policies and estimates as compared to those described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024.
Recent Accounting Pronouncements
See Note 1 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a full description of recent accounting pronouncements.
47
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We have operations both within the United States and internationally and we are exposed to market risk in the ordinary course of business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates and interest rates.
Foreign Currency Risk
Our condensed consolidated results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Substantially all of our sales contracts are denominated in U.S. dollars. Our expenses are generally denominated in the currencies of the countries where our operations are located. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative instruments. In the event our foreign sales and expenses increase, our operating results may be more significantly affected by foreign currency exchange rate fluctuations, which can affect our operating income or loss. The effect of a hypothetical 10% change in foreign currency exchange rates on our non-U.S. dollar monetary assets and liabilities would not have had a material impact on our historical condensed consolidated financial statements. Foreign currency transaction gains and losses and exchange rate fluctuations have not been material to our condensed consolidated financial statements.
A hypothetical 10% decrease in the U.S. dollar against other currencies would result in an increase in our operating loss of approximately $15.9 million and $17.5 million for the three months ended October 31, 2023 and 2024, respectively. The increase in this hypothetical change is due to an increase in our expenses denominated in foreign currencies. This analysis disregards the possibilities that rates can move in opposite directions and that losses from one geographic area may be offset by gains from another geographic area.
Interest Rate Risk
Our investment objective is to conserve capital and maintain liquidity to support our operations; therefore, we generally invest in highly liquid securities, consisting primarily of bank deposits, money market funds, commercial paper, U.S. government securities and corporate bonds. Such fixed and floating interest-earning instruments carry a degree of interest rate risk. The fair market value of fixed income securities may be adversely impacted by a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. Due to the short-term nature of our investment portfolio, we do not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair market value of our portfolio. Therefore, we do not expect our operating results or cash flows to be materially affected by any sudden change in interest rates.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Based on management’s evaluation, our principal executive officer and principal financial officer concluded, as of the end of the period covered by this report, that our disclosure controls and procedures are effective at a reasonable assurance level.
In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the most recently completed fiscal quarter ended October 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
48
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The information set forth under the "Legal Proceedings" subheading in Note 7 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.
Item 1A. Risk Factors
You should carefully consider the risks and uncertainties described under the heading "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2024, which is incorporated herein by reference, and all of the other information contained in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations", before making a decision to invest in our Class A common stock. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect our business. There have been no material changes from the risks and uncertainties previously disclosed under the "Risk Factors" section in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Issuer Purchases of Equity Securities
The following table summarizes the share repurchase activity for the three months ended October 31, 2024:
Period |
|
Total Number of Shares Purchased |
|
|
Average Price Paid Per Share |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) |
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs |
|
||||
|
|
(in thousands, except per share amounts) |
|
|||||||||||||
August 1 - 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
218,913 |
|
September 1 - 30, 2024 |
|
|
188 |
|
|
$ |
60.09 |
|
|
|
188 |
|
|
$ |
207,636 |
|
October 1 - 31, 2024 |
|
|
152 |
|
|
$ |
57.24 |
|
|
|
152 |
|
|
$ |
198,913 |
|
Total |
|
|
340 |
|
|
|
|
|
|
340 |
|
|
|
|
||
This table excludes shares withheld from stock awards to settle employee withholding obligations related to the vesting of such awards.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
49
Item 5. Other Information
Rule 10b5-1 Trading Plans
On
On
Item 6. Exhibits
See the Exhibit Index below for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.
50
EXHIBIT INDEX
|
|
Incorporated by Reference |
|
|||
Number |
Exhibit Title |
Form |
File No. |
Exhibit |
Filing Date |
Filed Herewith |
|
|
|
|
|
|
|
31.1 |
|
|
|
|
X |
|
31.2 |
|
|
|
|
X |
|
32.1* |
|
|
|
|
X |
|
32.2* |
|
|
|
|
X |
|
101.INS |
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XRBL tags are embedded within the Inline XBRL document |
|
|
|
|
X |
101.SCH |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
|
|
|
X |
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
|
|
|
|
X |
* These exhibits are furnished with this Quarterly Report on Form 10-Q and are not deemed filed with the Securities and Exchange Commission and are
not incorporated by reference in any filing of Nutanix, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filings.
51
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
NUTANIX, INC. |
|
|
|
Date: December 5, 2024 |
|
/s/ Rukmini Sivaraman |
|
|
Rukmini Sivaraman |
|
|
Chief Financial Officer |
|
|
(Principal Financial Officer) |
52