美國
證券和交易委員會
華盛頓特區 20549
表格
（標記一）
根據1934年證券交易法第13或15(d)節的季度報告 |
截至季度結束日期的財務報告
或
根據1934年證券交易法第13或15(d)條款的過渡報告 |
到 至
委員會檔案編號：
（依憑章程所載的完整登記名稱）
|
||
(依據所在地或其他管轄區) 的註冊地或組織地點) |
|
(國稅局僱主 識別號碼) |
(總辦事處地址，包括郵遞區號)
(註冊公司之電話號碼，包括區號)
根據法案第12(b)條規定註冊的證券：
每種類別的名稱 |
|
交易標的 |
|
每個註冊交易所的名稱 |
|
|
請勾選以下選項以表示申報人（1）已提交證券交易法1934年第13條或15(d)條所要求提交的所有報告，且在過去12個月中（或申報人需要提交此類報告的較短期間）已提交；（2）已受到過去90天內此類提交要求的限制。
請打勾表明申報人在過去的12個月（或申報人需在該較短期間內提交這些檔案）中已根據《對S-t法規（本章節第232.405條）的規定405條》提交了所有必須提交的交互式資料檔案。
請勾選相應的選項，以指示申報人是大型快速申報人、快速申報人、非快速申報人、較小型報告公司，還是新興成長型公司。詳細定義請參閱《交易所法》第1202條中的“大型快速申報人”、“快速申報人”、“較小型報告公司”和“新興成長型公司”定義。
|
☒ |
加速彙編申報人 |
|
☐ |
|
非加速文件提交者 |
|
☐ |
小型報告公司 |
|
|
|
|
|
新興成長公司 |
|
如果一家新興成長型企業，請打勾表示公司已選擇不使用擴展過渡期以符合根據《交易所法案》第13(a)條所提供的任何新的或修訂財務會計準則。 ☐
請在核取方框內表明公司是否為空殼公司（根據交易所法規120億2號所定義）。 是 ☐ 否
截至2024年11月30日，註冊人持有
目錄F 內容
|
|
|
頁碼 |
第一部分。 |
|
|
|
|
|
|
|
|
項目 1 |
6 |
|
|
|
|
|
|
項目2 |
31 |
|
|
|
|
|
|
項目 3 |
48 |
|
|
|
|
|
|
項目4 |
48 |
|
|
|
|
|
第二部分。 |
|
|
|
|
|
|
|
|
項目 1 |
49 |
|
|
|
|
|
|
項目1A |
49 |
|
|
|
|
|
|
項目2 |
49 |
|
|
|
|
|
|
項目 3 |
49 |
|
|
|
|
|
|
項目4 |
49 |
|
|
|
|
|
|
條款5 |
50 |
|
|
|
|
|
|
條款6 |
50 |
|
|
|
|
|
51 |
|||
52 |
|||
3
關於前瞻性陳述的特別說明
本季度報告（表格10-Q）包含根據1933年《證券法》（修訂版）第27A節和1934年《證券交易法》（修訂版）第21E節的定義，明確和隱含的前瞻性陳述，這些陳述涉及重大風險和不確定性。除歷史事實陳述外，本季度報告（表格10-Q）中包含的所有陳述，包括有關我們未來運營和財務狀況、我們的業務策略和計劃及我們未來運營目標的陳述，均爲前瞻性陳述。 "相信"、"可能"、"將"、"潛在"、"估計"、"繼續"、"預期"、"計劃"、"打算"、"可以"、"將會"、"期待"或具有類似實質意義的詞或表達，表明對未來事件或結果的不確定性，旨在識別前瞻性陳述。本季度報告（表格10-Q）中包括的前瞻性陳述包括但不限於有關以下內容的陳述：
4
我們對這些前瞻性陳述主要基於我們當前的期望和對未來事件及趨勢的預測，這些事件和趨勢可能影響我們的財務狀況、運營結果、業務策略、短期和長期的業務運作及目標，以及根據我們目前可獲得的信息的財務需求。這些前瞻性陳述受到多種風險、不確定性和假設的影響，包括我們在2024年7月31日結束的財年的10-K表格第一部分，第1A項下描述的"風險因素"。此外，我們的業務在一個非常競爭激烈和快速變化的環境中運營，新的風險時常出現。我們無法預測所有風險，也無法評估所有因素對我們業務的影響，或者任何因素或因素的組合可能在多大程度上導致實際結果與我們可能做出的任何前瞻性陳述中的結果顯著不同。鑑於這些風險、不確定性和假設，本季度報告中討論的前瞻性事件和趨勢可能不會發生，實際結果可能會與預期或前瞻性陳述中暗示的結果大相徑庭。
您不應將前瞻性聲明視爲對未來事件的預測。儘管我們相信前瞻性聲明中反映的預期是合理的，但我們無法保證未來的結果、表現或前瞻性聲明中反映的事件和情況將會實現或發生。本季度10-Q表格中的前瞻性聲明僅與聲明作出時的事件相關。我們不承擔任何義務，並明確拒絕承擔任何義務，更新、修改或以其他方式修訂或公開發布任何對這些前瞻性聲明的修訂結果，以反映新信息或意外或後續事件的發生，法律另有要求的除外。我們可能無法實際實現前瞻性聲明中披露的計劃、意圖或預期，因此您不應對我們的前瞻性聲明過度依賴。
5
第一部分. 財務資訊AL資訊
項目 1. 財務狀態表
|
頁面 |
|
|
7 |
|
|
|
8 |
|
|
|
9 |
|
|
|
10 |
|
|
|
11 |
|
|
|
12 |
|
|
|
12 |
|
14 |
|
16 |
|
18 |
|
20 |
|
23 |
|
25 |
|
25 |
|
25 |
|
28 |
|
28 |
|
29 |
6
nutanix, INC.
簡明綜合賬目表縮編平衡表
(未經審計)
|
|
截至 |
|
|||||
|
|
7月31日， |
|
|
10月31日 |
|
||
|
|
（單位：千，每股資料除外） |
|
|||||
資產 |
|
|
|
|
|
|
||
流動資產: |
|
|
|
|
|
|
||
現金及現金等價物 |
|
$ |
|
|
$ |
|
||
短期投資 |
|
|
|
|
|
|
||
結餘應收帳款$ |
|
|
|
|
|
|
||
遞延佣金—當前 |
|
|
|
|
|
|
||
預付費用及其他流動資產 |
|
|
|
|
|
|
||
流動資產總額 |
|
|
|
|
|
|
||
不動產及設備，淨額 |
|
|
|
|
|
|
||
營運租賃使用權資產 |
|
|
|
|
|
|
||
遞延佣金—非流動 |
|
|
|
|
|
|
||
無形資產，扣除累計攤銷 |
|
|
|
|
|
|
||
商譽 |
|
|
|
|
|
|
||
其他資產—非流動 |
|
|
|
|
|
|
||
總資產 |
|
$ |
|
|
$ |
|
||
負債及股東權益不足 |
|
|
|
|
|
|
||
流動負債： |
|
|
|
|
|
|
||
應付賬款 |
|
$ |
|
|
$ |
|
||
應計的薪資和福利費用 |
|
|
|
|
|
|
||
應計費用及其他流動負債 |
|
|
|
|
|
|
||
Stockholders’ deficit: |
|
|
|
|
|
|
||
Common stock |
|
|
|
|
|
|
||
流動負債總額 |
|
|
|
|
|
|
||
遞延收入—非流動 |
|
|
|
|
|
|
||
經營租賃負債—非流動 |
|
|
|
|
|
|
||
可轉換優先票據，淨額 |
|
|
|
|
|
|
||
其他負債—非流動 |
|
|
|
|
|
|
||
總負債 |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
股東資本赤字： |
|
|
|
|
|
|
||
普通股，面值$ |
|
|
|
|
|
|
||
資本公積額額外增資 |
|
|
|
|
|
|
||
其他綜合收益累積額 |
|
|
|
|
|
|
||
累積虧損 |
|
|
( |
) |
|
|
( |
) |
股東權益的赤字為 |
|
|
( |
) |
|
|
( |
) |
總負債及股東權益赤字 |
|
$ |
|
|
$ |
|
||
請參閱附帶的簡化合並基本報表的說明。
7
nutanix, INC.
綜合財務報表摘要綜合損益表
(未經審計)
|
|
截至三個月 |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
（單位：千，每股資料除外） |
|
|||||
營業收入: |
|
|
|
|
|
|
||
產品 |
|
$ |
|
|
$ |
|
||
壓力位、權益及其他服務 |
|
|
|
|
|
|
||
總營業收入 |
|
|
|
|
|
|
||
營業成本: |
|
|
|
|
|
|
||
產品 |
|
|
|
|
|
|
||
支持、權利和其他服務 |
|
|
|
|
|
|
||
總營業成本 |
|
|
|
|
|
|
||
毛利潤 |
|
|
|
|
|
|
||
營運費用： |
|
|
|
|
|
|
||
銷售和市場推廣 |
|
|
|
|
|
|
||
研發 |
|
|
|
|
|
|
||
一般及行政費用 |
|
|
|
|
|
|
||
營業費用總額 |
|
|
|
|
|
|
||
營運(虧損)收入 |
|
|
( |
) |
|
|
|
|
其他（費用）收入，淨 |
|
|
( |
) |
|
|
|
|
(虧損) 稅前收入 |
|
|
( |
) |
|
|
|
|
所得稅準備 |
|
|
|
|
|
|
||
淨（損失）收入 |
|
$ |
( |
) |
|
$ |
|
|
歸屬於A類的每股淨(虧損)收入 |
|
$ |
( |
) |
|
$ |
|
|
歸屬於A類普通股東的淨(虧損)每股收益 |
|
$ |
( |
) |
|
$ |
|
|
計算歸屬於A類普通股東的淨 |
|
|
|
|
|
|
||
計算歸屬於A類普通股東的淨 |
|
|
|
|
|
|
||
請參閱附帶的簡化合並基本報表的說明。
8
nutanix, INC.
綜合總表綜合收益 (損失) 的報告
(未經審計)
|
|
截至三個月 |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
（以千為單位) |
|
|||||
淨（損失）收入 |
|
$ |
( |
) |
|
$ |
|
|
其他綜合收益，稅後淨額： |
|
|
|
|
|
|
||
可供出售證券未實現收益的變動 |
|
|
|
|
|
|
||
綜合(虧損)收益 |
|
$ |
( |
) |
|
$ |
|
|
請參閱附帶的簡化合並基本報表的說明。
9
nutanix, INC.
壓縮的綜合報表 股東赤字表
(未經審計)
|
|
2023年10月31日結束的三個月 |
|
|||||||||||||||||||||
|
|
普通股 |
|
|
追加 |
|
|
累積的 |
|
|
累積的 |
|
|
總計 |
|
|||||||||
|
|
股份 |
|
|
金額 |
|
|
資本 |
|
|
損失 |
|
|
赤字 |
|
|
赤字 |
|
||||||
|
|
（以千為單位) |
|
|||||||||||||||||||||
2023年7月31日餘額 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
通過員工股權發行普通股 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
通過ESPP購買發行普通股 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
購回和撤銷普通股 |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
基於股票的薪酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
其他綜合收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
淨虧損 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
餘額 - 2023年10月31日 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
|
|
截至2024年10月31日的三個月 |
|
|||||||||||||||||||||
|
|
普通股 |
|
|
追加 |
|
|
累積的 |
|
|
累積的 |
|
|
總計 |
|
|||||||||
|
|
股份 |
|
|
金額 |
|
|
資本 |
|
|
收入 |
|
|
赤字 |
|
|
赤字 |
|
||||||
|
|
（以千為單位) |
|
|||||||||||||||||||||
餘額 - 2024年7月31日 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||||
通過員工股權發行普通股 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
通過ESPP購買發行普通股 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
與淨分享結算相關的股份 |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
購回和撤銷普通股 |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
基於股票的薪酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
其他綜合收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
凈利潤 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
餘額 - 2024年10月31日 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||||
請參閱附帶的簡化合並基本報表的說明。
10
nutanix, INC.
簡化合併財務報表現金流量表
(未經審計)
|
|
截至三個月 |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
（以千為單位) |
|
|||||
經營活動現金流量： |
|
|
|
|
|
|
||
淨（損失）收入 |
|
$ |
( |
) |
|
$ |
|
|
調整淨損失為經營活動提供的淨現金流量： |
|
|
|
|
|
|
||
折舊及攤銷 |
|
|
|
|
|
|
||
基於股票的薪酬 |
|
|
|
|
|
|
||
債務折價和發行成本攤銷 |
|
|
|
|
|
|
||
經營租賃成本，減除增值 |
|
|
|
|
|
|
||
非現金利息費用 |
|
|
|
|
|
|
||
其他 |
|
|
( |
) |
|
|
( |
) |
營運資產和負債的變化： |
|
|
|
|
|
|
||
應收帳款，淨額 |
|
|
|
|
|
|
||
推延佣金 |
|
|
|
|
|
|
||
預付費用及其他資產 |
|
|
|
|
|
( |
) |
|
應付賬款 |
|
|
|
|
|
( |
) |
|
應計的薪資和福利費用 |
|
|
( |
) |
|
|
( |
) |
應計費用及其他負債 |
|
|
( |
) |
|
|
( |
) |
購併支付金額，扣除所獲現金 |
|
|
( |
) |
|
|
( |
) |
透過收入 |
|
|
|
|
|
|
||
經營活動產生的淨現金流量 |
|
|
|
|
|
|
||
投資活動之現金流量: |
|
|
|
|
|
|
||
通過員工股權激勵計劃出售股份的收益 |
|
|
|
|
|
|
||
投資購買 |
|
|
( |
) |
|
|
( |
) |
購置財產及設備 |
|
|
( |
) |
|
|
( |
) |
投資活動中使用的淨現金 |
|
|
( |
) |
|
|
( |
) |
來自籌資活動的現金流量: |
|
|
|
|
|
|
||
通過員工股權激勵計劃出售股份所得款項 |
|
|
|
|
|
|
||
現金及現金等價物與受限現金—期初 |
|
|
|
|
|
( |
) |
|
購回普通股 |
|
|
( |
) |
|
|
( |
) |
$ |
|
|
( |
) |
|
|
( |
) |
籌集資金的淨現金流量 |
|
|
( |
) |
|
|
( |
) |
現金、現金等價物和受限現金的淨增加 |
|
$ |
|
|
$ |
|
||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
||
Cash paid for income taxes |
|
$ |
|
|
$ |
|
||
限制性現金 (1) |
|
|
|
|
|
|
||
資產買入中包含應付賬款以及 |
|
$ |
|
|
$ |
|
||
現金流資訊的補充揭示： |
|
|
|
|
|
|
||
支付所得稅現金 |
|
$ |
|
|
$ |
|
||
非現金投資和融資信息的補充披露 |
|
|
|
|
|
|
||
購買的房地產和設備包括在應付賬款中 |
|
$ |
|
|
$ |
|
||
淨股份結算的未支付稅款包括在應計費用和其他負債中 |
|
$ |
|
|
$ |
|
||
請參閱附帶的簡化合並基本報表的說明。
11
註釋 1. 概述與B當前展示的基礎
組織和業務簡介
Nutanix, Inc. 於2009年9月在特拉華州成立。Nutanix, Inc. 總部位於加利福尼亞州聖荷西，並與其全資子公司（統稱爲“我們”、“我們的”或“Nutanix”）一起，在北美、歐洲、亞太、中東、拉丁美洲和非洲開展業務。
我們是雲軟件的全球領導者，爲組織提供一個單一平台，在任何地方運行應用程序和管理數據。我們的願景是讓混合多雲部署變得簡單，使客戶能夠專注於實現他們的業務目標。我們的使命是通過一個開放的混合多雲平台，提供豐富的數據服務，以運行和管理任何應用程序，無論在何處。
我們的Nutanix雲平台旨在使組織能夠構建混合多雲基礎設施，提供一致的雲操作模型，採用一個單一平台，在覈心數據中心、邊緣和公共雲中運行應用程序和管理數據，同時支持各種虛擬機監控程序和容器平台。Nutanix雲平台支持多種工作負載，具有不同的計算、存儲和網絡要求，包括關鍵業務應用程序、數據平台（包括SQL和NoSQL數據庫以及商業智能應用程序）、通用工作負載（包括系統基礎設施、網絡和安防-半導體），以及終端用戶計算和虛擬桌面基礎設施服務，以及企業人工智能（“人工智能”）工作負載（包括機器學習和生成性人工智能工作負載）和雲原生應用程序（包括現代的、容器化的應用程序）。
我們的業務組織爲一個單一的運營和可報告的部門。我們的訂閱式商業模式爲客戶提供靈活性，以根據其特定的業務需求選擇首選的許可級別和期限。基於訂閱的商業模式意味着我們的產品，包括相關的支持和授權安排，以一定的期限出售。我們的解決方案主要通過渠道合作伙伴和原始設備製造商（“OEMs”）（統稱爲“合作伙伴”）銷售，並直接交付給我們的最終客戶。
合併原則和重要會計政策
所附的簡明合併基本報表，包括了nutanix，Inc.及其全資子公司的帳戶，已遵循美國普遍接受的會計原則（"U.S. GAAP"）編制，並在所有重大方面與我們截至2024年7月31日的10-k表年度報告中包含的原則一致，該報告於2024年9月19日提交給證券交易委員會（"SEC"）。所有的關聯公司賬目和交易都已在合併中消除。該簡明合併基本報表未經審計，但包含了爲公正呈現我們季度結果所需的所有正常經常性調整。截至2024年7月31日的合併資產負債表來源於經過審計的基本報表；然而，它不包括U.S. GAAP對完整基本報表所需的所有信息和附註。這些簡明合併基本報表應與我們截至2024年7月31日的10-k表年度報告中的合併基本報表和相關說明一起閱讀。.
12
估算的使用
根據美國公認會計原則編制中期簡明合併財務報表要求管理層做出影響簡明合併財務報表和附註中報告的金額的估計和假設。此類管理估計和假設包括但不限於對產品和相關支持的銷售價格的最佳估計；無形資產和財產及設備的使用壽命和可收回性；信貸損失備抵額；股票獎勵公允價值的確定；所得稅會計，包括遞延所得稅資產的估值補貼和不確定的稅收狀況；對合同製造商的購買承諾負債；銷售佣金支出和遞延佣金的受益期；是否一種安排是或包含租賃；衡量使用權資產和租賃負債現值的增量借款利率；用於確定與先前未清償債務轉換特徵相關的或有負債公允價值的投入
風險集中
收入和應收賬款的集中 — 我們主要通過合作伙伴銷售產品，偶爾直接向終端客戶銷售產品。在截至 2023 年 10 月 31 日和 2024 年 10 月 31 日的三個月，最終客戶的佔比不超過
對於每個重要合作伙伴，收入佔總收入的百分比和應收賬款佔應收賬款總額的百分比淨額如下：
|
|
收入 |
|
|
截至的應收賬款 |
|
||||||||||
|
|
三個月結束 |
|
|
七月三十一日， |
|
|
十月三十一日 |
|
|||||||
合作夥伴 |
|
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) |
|
||||
重要會計政策摘要
最近發佈但尚未通過的會計公告
2023年11月，財務會計準則委員會（“FASB”）發佈了《2023-07年會計準則更新》（“ASU”），《分部報告（主題280）：對應報告的分部披露的改進》，該報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日之後的年度內生效，允許提前採用，並要求在完全追溯的基礎上申請。新的亞利桑那州立大學將從2025財年的10-k表格開始對我們生效。我們目前正在評估這項新標準將對我們的披露產生的影響。
13
在2023年12月，FASB發佈了ASU 2023-09，所得稅（主題740）：所得稅披露改進，該標準對所得稅披露進行改進。該標準要求提供有關報告實體有效稅率調節的分項信息，以及已繳納所得稅的信息。本次更新的修訂適用於2024年12月15日之後開始的財年，允許提前採用。這個新的ASU將於我們2026財年開始生效。我們目前正在評估這一新標準對我們披露的影響。
在2024年11月，FASB發佈了ASU 2024-03，損益表—綜合收益報告—費用分項披露（子主題220-40）：損益表費用的分項，要求在財務報表附註中對某些類別的費用提供額外的分項披露，這些費用也被列示在運營報表的面上。這個新的ASU適用於2026年12月15日之後開始的財年，以及2027年12月15日之後開始的中期報告期，允許提前採用。這個新的ASU將於我們2028財年開始生效。 我們目前正在評估這一新標準對我們披露的影響。
注意事項 2。收入，遞延收入場地和延期佣金
收入分解和收入確認
Nutanix 雲平台可以部署在覈心數據中心、邊緣或公共雲中，在各種合格的硬件平台（包括 Nutanix 品牌的 NX 硬件系列）上運行，通過 Nutanix 雲集群部署在亞馬遜網絡服務（“AWS”）和微軟 Azure 等流行的公有云環境中，或者，如果是基於雲的軟件和軟件即服務（“SaaS”）產品，則可以通過託管服務部署。我們基於訂閱期限的許可證單獨出售，也可以與按訂單配置的服務器一起出售。我們基於訂閱期限的許可證的期限通常從 至
下表描述了按收入類型分列的收入情況，這與我們評估財務業績的方式一致：
|
|
三個月結束 |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
|
|
(以千計) |
|
|||||
訂閱 |
|
$ |
|
|
$ |
|
||
專業服務 |
|
|
|
|
|
|
||
其他非訂閱產品 |
|
|
|
|
|
|
||
總收入 |
|
$ |
|
|
$ |
|
||
訂閱收入 — 訂閱收入包括任何有明確期限的履約義務，該義務來自軟件授權和支持訂閱、訂閱軟件許可證和基於雲的SaaS產品的銷售。
專業服務收入 — 我們還通過我們的產品銷售專業服務。我們在提供專業服務時確認與之相關的收入。
14
其他非訂閱產品營業收入 — 其他非訂閱產品營業收入包括約 $
具有多項履約義務的合同 - 我們與客戶的大多數合同包含多項履約義務。對於這些合同，如果它們是獨立的，我們將單獨爲每項履約義務進行覈算。交易價格按照相對獨立銷售價格（“SSP”）的基礎分配給單獨的履約義務。對於我們經常單獨銷售的交付成果，例如我們核心產品的軟件許可和支持訂閱，我們通過評估過去12個月內的獨立銷售來確定SSP。對於那些不經常銷售的產品，我們通過考慮市場條件和其他因素（包括合同的價值、銷售的產品和地理位置等）來確定SSP。
合同餘額 - 營業收入確認的時間可能與向客戶開具發票的時間不同。應收賬款按照開具的金額減去信用損失準備計提額淨額計入。在我們交付商品或提供服務的期間，或我們收取款項的權利無條件時，將確認應收賬款。在收入確認早於開票的情況下，將創建未開票應收賬款，代表合同資產。未開票應收賬款的餘額，包括在資產負債表上的應收賬款淨額，爲$
我們的客戶通常提前開具發票，包括多年訂閱的發票，付款期限爲30-45天。我們通過考慮過去的收款經驗、客戶的信用質量、應收賬款餘額的年齡、當前和未來的經濟狀況以及可能影響已報金額的收回性的預測來評估應收賬款的信用損失。截至2024年7月31日和2024年10月31日的應收賬款淨額，減去信用損失準備金，在隨附的簡明合併資產負債表中呈現。
獲取和履行合同的成本 - 我們在客戶簽訂合同時會資本化支付給銷售人員的佣金以及相關的薪資稅。這些成本記錄爲簡明合併資產負債表中的遞延佣金，分爲流動和非流動部分。我們根據銷售報酬計劃判斷是否應推遲成本，如果佣金是增量的並且在未簽訂客戶合同的情況下不會發生，我們認爲應推遲這些成本。根據預期受益期間超過初始合同期限的佣金支付，而預計續約時支付的佣金與初始合同不成正比，我們按照與整個受益期間的收入確認模式一致的系統方式確認遞延成本，並將其包括在簡明合併利潤表的銷售和營銷費用中。我們通過評估客戶合同的預期續約、與客戶的關係持續時間、客戶保留數據、我們的科技發展生命週期和其他因素來確定預期受益期間。遞延成本會定期進行減值檢查。
由政府機構徵收的稅款，並且與我們和客戶之間特定營業收入交易同時徵收的稅款，在我們的簡明綜合經營報表中以淨基礎呈現。
15
延遲營業收入 — 延遲營業收入主要包括已開具發票但尚未確認爲營業收入的金額，主要涉及軟件授權和支持訂閱以及專業服務。 延遲營業收入的流動部分表示預計將在簡明綜合資產負債表日期的一年內確認爲營業收入的金額。
所提供期間延遲營業收入（合同負債）和推遲佣金（合同資產）的重大變化如下：
|
|
遞延 |
|
|
遞延 |
|
||
|
|
（以千為單位) |
|
|||||
截至2024年7月31日的結餘 |
|
$ |
|
|
$ |
|
||
增加 (1) |
|
|
|
|
|
|
||
已確認的營業收入/佣金 |
|
|
( |
) |
|
|
( |
) |
截至2024年10月31日的餘額 |
|
$ |
|
|
$ |
|
||
截至2023年10月31日的三個月期間，我們確認了約$的營業收入
的部分遞延金額。我們很多已籤的但未開具發票的履行義務受取消條款約束。分配給剩餘履約義務的營業收入代表尚未確認的合同收入（“合同未認可”），其中包括遞延營收和將在未來階段開具發票並確認爲營收的不可取消金額，不包括受取消條款約束的履約義務。截至
注意事項 3. 公允價值UE 測量
我們按照持續計量基礎衡量的金融資產的公允價值如下：
|
|
截至2024年7月31日 |
|
|||||||||||||
|
|
一級 |
|
|
二級 |
|
|
三級 |
|
|
總計 |
|
||||
|
|
（以千為單位) |
|
|||||||||||||
財務資產，流動資產： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
現金等價物： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
貨幣市場基金 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
美國政府有價證券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
商業本票 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
短期投資： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
公司債券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
商業本票 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
美國政府有價證券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
按公允價值計量的總額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
現金 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
現金、現金等價物及短期投資總額 |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
金融資產，非流動資產： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
可轉換債券應收款項 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
16
|
|
截至2024年10月31日 |
|
|||||||||||||
|
|
一級 |
|
|
二級 |
|
|
三級 |
|
|
總計 |
|
||||
|
|
(以千爲單位) |
|
|||||||||||||
流動金融資產： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
現金及現金等價物： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
貨幣市場基金 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
美國政府債券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
商業票據 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
短期投資： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
公司債券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
商業票據 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
美國政府債券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
總計以公允價值計量 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
現金 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
現金、現金等價物和短期投資總和 |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
非流動財務資產： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
可轉換的應收票據 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
未根據持續基礎上的公允價值覈算的金融工具
我們按公允價值報告我們的金融工具，除了2027年到期的可轉換高級票據（"2027票據"）外。未按持續基礎上的公允價值覈算的金融工具，出於披露目的按季度公允價值計量。
|
|
截至2024年7月31日 |
|
|
截至2024年10月31日 |
|
||||||||||
|
|
資產 |
|
|
估算的 |
|
|
價值 |
|
|
估計 |
|
||||
|
|
(以千計) |
|
|||||||||||||
2027票據 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
截至2024年7月31日和2024年10月31日的2027票據賬面價值減去未攤銷的債券發行成本 減去未攤銷的債券發行成本$
2027年票據的總估計公平價值是基於每$的收盤交易價格確定的
17
註釋 4. 餘額 資產負債表 元件
短期投資
我們短期投資的攤銷成本大致與其公允價值相符。與我們短期投資相關的未實現損失通常由於利率波動，而非信用質量引起。然而，我們會審查處於未實現損失狀態的個別證券，以評估它們是否經歷或預期會經歷導致公允價值下降的信用損失。截至2024年7月31日和2024年10月31日，我們的短期投資未實現的收益和損失不重大，且並非由於信用質量下降造成。因此，截至2024年7月31日和2024年10月31日，我們未記錄這些投資的任何信用損失。
下表總結了我們在可交易債務證券中按合同到期日估計的公允價值：
|
|
截至 |
|
|
|
|
（以千為單位) |
|
|
一年內到期的 |
|
$ |
|
|
到期時間爲一至三年 |
|
|
|
|
總計 |
|
$ |
|
|
預付費用和其他流動資產
預付費用和其他流動資產包括以下內容：
|
|
截至 |
|
|||||
|
|
7月31日， |
|
|
10月31日 |
|
||
|
|
（以千為單位) |
|
|||||
預付營業費用 |
|
$ |
|
|
$ |
|
||
增值稅應收款 |
|
|
|
|
|
|
||
其他流動資產 |
|
|
|
|
|
|
||
預付費用及其他流動資產總額 |
|
$ |
|
|
$ |
|
||
18
資產和設備，淨值
資產和設備淨值包括以下內容:
|
|
|
|
截至 |
|
|||||
|
|
估計 |
|
7月31日， |
|
|
10月31日 |
|
||
|
|
(以月爲單位) |
|
（以千為單位) |
|
|||||
計算機、生產、工程和其他設備 |
|
|
$ |
|
|
$ |
|
|||
演示單元 |
|
|
|
|
|
|
|
|||
租賃改良 |
|
(1) |
|
|
|
|
|
|
||
軟件 |
|
(2) |
|
|
|
|
|
|
||
傢俱及裝置 |
|
|
|
|
|
|
|
|||
資產總計，原值 |
|
|
|
|
|
|
|
|
||
減：累積折舊 |
|
|
|
|
( |
) |
|
|
( |
) |
總固定資產淨值 |
|
|
|
$ |
|
|
$ |
|
||
與我們的物業和設備相關的折舊費用爲$
商譽和無形資產淨額
截至2024年10月31日的三個月內，商譽的賬面價值沒有變化。
無形資產，淨額由以下項目組成：
|
|
截至 |
|
|||||
|
|
7月31日， |
|
|
10月31日 |
|
||
|
|
（以千為單位) |
|
|||||
開發出的科技 |
|
$ |
|
|
$ |
|
||
客戶關係 |
|
|
|
|
|
|
||
商標 |
|
|
|
|
|
|
||
總無形資產，毛額 |
|
|
|
|
|
|
||
減去： |
|
|
|
|
|
|
||
開發科技的累計攤銷 |
|
|
( |
) |
|
|
( |
) |
客戶關係的累計攤銷 |
|
|
( |
) |
|
|
( |
) |
商標的累計攤銷 |
|
|
( |
) |
|
|
( |
) |
累計攤銷總額 |
|
|
( |
) |
|
|
( |
) |
無形資產總額，淨額 |
|
$ |
|
|
$ |
|
||
與我們的無形資產相關的攤銷費用在壓縮合並運營報表中被確認，屬於開發科技的產品成本和客戶關係及商標的銷售和營銷費用。
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