Nutanix almost turned to positive cash flow in the last quarter • The Register

Hyperconverged infrastructure software company Nutanix almost, but not quite, stopped spending money as its cash flow approached positivity in its latest round of results.

In September, CEO Rajiv Ramaswami said The register that cash flow positivity was within reach, and last night’s figures for the company’s first quarter of fiscal 2022 indicate he may well be right.

Cash flow was still negative for its first quarter ended Oct. 31, but at $ 1.9 million it was down impressively from $ 16.3 million for the same period a year ago. Revenue increased 21% to $ 378.5 million from $ 312.8 million, and the company’s annual recurring revenue (ARR) was just under $ 1 billion at $ 952.6 million, from $ 569, $ 5 at the same time last year.

The losses were, however, mind-blowing at first glance. As operating losses were down to $ 137.3 million from $ 182 million in the same period last year, the “Other expenses” column bled red to the tune of $ 278.6 million , an increase of almost $ 200 million. It included a charge of $ 198 million in fair value of derivative liability, $ 90.5 million for depreciation and amortization and $ 64 million on debt repayments. Nutanix reported a total net loss of $ 419.9 million.

During a call with analysts, Ramaswami noted that the move to subscriptions was going well along with record annual contract value (ACV) billings. He was also quick to point out that prudent expense management “allowed us to almost break even free cash flow in the quarter.”

Buzzwords came out of the CEO’s tongue as he bragged about “strong adoption of our hybrid multi-cloud portfolio,” clients signed up in the quarter (now 20,700, growth of 15% year-on-year) and deals with Citrix, Lenovo, HPE and Red Hat.

It was up to CFO Duston Williams to tell analysts that with progress in moving to a subscription model, annual forecasts would now be “appropriate.” The cash flow positivity Ramaswami announced would occur, and ACV billing for FY 22 would be between $ 740 million and $ 750 million, with revenues ranging between $ 1.615 billion and $ 1.630 billion. Operating expenses higher than forecast by approximately $ 1.48 billion.

What about supply chain issues? “Minimal impact,” Ramaswami said, although he added: “We continue to monitor the situation closely. While its customers and partners are struggling to procure hardware, Nutanix appears to be reaping the rewards of its switch to software a few years ago.

Although the company has done better than expected, the market reaction has been relatively subdued and the share price has remained stable – up from the same period last year, but down from heady highs. September. ®

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