Nutanix Execs Talk VMware-Broadcom, Layoffs As Stock Spikes
‘Yes, there is definitely a higher level of engagement from VMware customers as a result of what’s going on out there, and they’re more open to discussions with us,’ says Nutanix CEO Rajiv Ramaswami.
Nutanix Stock Soaring After Q4 Financial Earnings Results
As Nutanix announced generating $386 million in revenue during its fourth fiscal quarter, Nutanix executives also discussed employee layoffs and competition with VMware as it prepares to be acquired by Broadcom.
“We’re seeing more talent out there, from VMware, looking for new career opportunities,” said Rajiv Ramaswami, CEO of Nutanix, during the company’s fourth-quarter earnings call with media and analysts.
“Yes, there is definitely a higher level of engagement from VMware customers as a result of what’s going on out there, and they’re more open to discussions with us,” said Nutanix’s CEO.
Nutanix Earnings Results
The San Jose, Calif.-based hybrid cloud and hyperconverged software specialist generated $386 million in fourth-quarter sales, down 1 percent year over year, but above Nutanix’s previous guidance range of $340 million to $360 million.
Nutanix’s annual recurring revenue in the quarter reached $1.2 billion, representing an increase of 37 percent year over year.
The company’s annual contract value (ACV) billings grew 10 percent year over year to $193 million.
Looking at Nutanix’s entire fiscal year 2022, which ended July 31, 2022, the company generated $1.58 billion in total revenue, up 13 percent year over year.
Nutanix reported $756 million in ACV billings for its entire fiscal year 2022, up 27 percent year over year.
In terms of free cash flow, Nutanix generated free cash flow of $18.5 million in fiscal year 2022, compared with having negative $158 million cash flow in fiscal year 2021.
“For the first time since 2018, we achieved positive free cash flow for the entire fiscal year,” said Ramaswami.
Aside from the financial results, executives spoke about Nutanix’s recent layoffs and potential employee cuts ahead, competition with VMware as well as full-year financial guidance for its current fiscal year 2023.
“We made the difficult decision to reduce our head count by letting go of approximately 270 employees, about 4 percent of our total head count,” said Nutanix CFO Rukmini Sivaraman. “We expect [this] to result in estimated annualized expense reduction of approximately $55 million to $60 million.”
CRN breaks down the five biggest takeaways from Nutanix’s fourth-quarter earnings report.