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Classified in: Science and technology, Business
Subjects: EARNINGS, Photo/Multimedia, Conference Call, Webcast

Nutanix Reports Third Quarter Fiscal 2024 Financial Results


Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced financial results for its third quarter ended April 30, 2024.

"We delivered solid third quarter results reflecting disciplined execution and the strength of our business model," said Rajiv Ramaswami, President and CEO of Nutanix. "Our recent announcements around modern applications, generative AI and partnerships reflect our continued focus on driving innovation and broadening our partnerships to further enhance the value proposition of Nutanix Cloud Platform."

"Our third quarter results demonstrated a good balance of top and bottom line performance with 24% year-over-year ARR growth and strong year-to-date free cash flow generation," said Rukmini Sivaraman, CFO of Nutanix. "We remain focused on delivering sustainable, profitable growth."

Third Quarter Fiscal 2024 Financial Summary

 

Q3 FY'24

Q3 FY'23

Y/Y Change

Annual Contract Value (ACV)1 Billings

$288.9 million

$239.8 million

20%

Annual Recurring Revenue (ARR)2

$1.82 billion

$1.47 billion

24%

Average Contract Duration3

3.0 years

3.0 years

0.0 year

Revenue

$524.6 million

$448.6 million

17%

GAAP Gross Margin

84.8%

81.6%

320 bps

Non-GAAP Gross Margin

86.5%

84.0%

250 bps

GAAP Operating Expenses

$456.5 million

$424.8 million

7%

Non-GAAP Operating Expenses

$380.4 million

$359.8 million

6%

GAAP Operating Loss

$(11.6) million

$(58.6) million

$47.0 million

Non-GAAP Operating Income

$73.3 million

$17.2 million

$56.1 million

GAAP Operating Margin

(2.2)%

(13.1)%

10.9% pts

Non-GAAP Operating Margin

14.0%

3.8%

10.2% pts

Net Cash Provided by Operating Activities

$96.4 million

$74.5 million

$21.9 million

Free Cash Flow

$78.3 million

$52.7 million

$25.6 million

Reconciliations between GAAP and non-GAAP financial measures and key performance measures, to the extent available, are provided in the tables of this press release.

Recent Company Highlights

Fourth Quarter Fiscal 2024 Outlook

 

 

ACV Billings

$295 - $305 million

Revenue

$530 - $540 million

Non-GAAP Gross Margin

85% to 86%

Non-GAAP Operating Margin

9% to 10%

Weighted Average Shares Outstanding (Diluted)4

Approximately 302 million

Fiscal 2024 Outlook

 

 

ACV Billings

$1.12 - $1.13 billion

Revenue

$2.13 - $2.14 billion

Non-GAAP Gross Margin

~86%

Non-GAAP Operating Margin

~15%

Free Cash Flow

$520 - $540 million

Supplementary materials to this press release, including our third quarter fiscal 2024 earnings presentation, can be found at https://ir.nutanix.com/financial/quarterly-results.

Webcast and Conference Call Information

Nutanix executives will discuss the Company's third quarter fiscal 2024 financial results on a conference call today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. Interested parties may access the conference call by registering at this link to receive dial in details and a unique PIN number. The conference call will also be webcast live on the Nutanix Investor Relations website at ir.nutanix.com. An archived replay of the webcast will be available on the Nutanix Investor Relations website at ir.nutanix.com shortly after the call.

Footnotes

1Annual Contract Value, or ACV, is defined as the total annualized value of a contract. The total annualized value for a contract is calculated by dividing the total value of the contract by the number of years in the term of such contract, using, where applicable, an assumed term of five years for life-of-device contracts that do not have a specified term. Excludes amounts related to professional services and hardware. ACV Billings, for any given period, is defined as the sum of the ACV for all contracts billed during the given period.

2Annual Recurring Revenue, or ARR, for any given period, is defined as the sum of ACV for all subscription contracts in effect as of the end of a specific 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. Excludes all life-of-device contracts.

3Average Contract Duration represents the dollar-weighted term, calculated on a billings basis, across all subscription and life-of-device contracts, using an assumed term of five years for life-of-device licenses, executed in the period.

4Weighted average share count used in computing diluted non-GAAP net income per share.

Non-GAAP Financial Measures and Other Key Performance Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, this press release includes the following non-GAAP financial and other key performance measures: non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, free cash flow, Annual Contract Value Billings (or ACV Billings), Annual Recurring Revenue (or ARR), and Average Contract Duration. In computing non-GAAP financial measures, we exclude certain items such as stock-based compensation and the related income tax impact, costs associated with our acquisitions (such as amortization of acquired intangible assets, income tax-related impact, and other acquisition-related costs), costs related to the impairment and early exit of operating lease-related assets, restructuring charges, litigation settlement accruals and legal fees related to certain litigation matters, the amortization of the debt discount and issuance costs, interest expense related to convertible senior notes, gains on divestitures, and other non-recurring transactions and the related tax impact. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, and non-GAAP operating margin are financial measures which we believe provide useful information to investors because 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 our management and investors about the amount of cash generated by the business after necessary capital expenditures, and we define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment. ACV Billings is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the topline growth of our business during our transition to a subscription-based business model because it takes into account variability in term lengths. ARR is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the topline growth of our subscription business because it takes into account variability in term lengths. 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. However, these non-GAAP financial and key performance measures have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, and free cash flow are not substitutes for 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 ACV Billings, ARR, or Average Contract Duration, so we have not reconciled the ACV Billings, ARR, or Average Contract Duration data included in this press release 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 in the tables captioned "Reconciliation of GAAP to Non-GAAP Profit Measures" and "Reconciliation of GAAP Net Cash Provided By Operating Activities to Non-GAAP Free Cash Flow," and not to rely on any single financial measure to evaluate our business. This press release also includes the following forward-looking non-GAAP financial measures as part of our fourth quarter fiscal 2024 outlook and/or our fiscal 2024 outlook: non-GAAP gross margin, non-GAAP operating margin, and free cash flow. We are unable to reconcile these forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures without unreasonable efforts, as we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact the GAAP financial measures for these periods but would not impact the non-GAAP financial measures.

Forward-Looking Statements

This press release contains express and implied forward-looking statements, including, but not limited to, statements regarding: our business momentum and prospects, our fourth quarter fiscal 2024 outlook, and our fiscal 2024 outlook.

These forward-looking statements are not historical facts and instead are based on our current expectations, estimates, opinions, and beliefs. Consequently, you should not rely on these forward-looking statements. The accuracy of these forward-looking statements depends upon future events and involves risks, uncertainties, and other factors, including factors that may be beyond our control, that may cause these statements to be inaccurate and cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by such statements, including, among others: the inherent uncertainty or assumptions and estimates underlying our projections and guidance, which are necessarily speculative in nature; any failure to successfully implement or realize the full benefits of, or unexpected difficulties or delays in successfully implementing or realizing the full benefits of, our business plans, strategies, initiatives, vision, and objectives; our ability to achieve, sustain and/or manage future growth effectively; the rapid evolution of the markets in which we compete, including the introduction, or acceleration of adoption of, competing solutions, including public cloud infrastructure; failure to timely and successfully meet our customer needs; delays in or lack of customer or market acceptance of our new solutions, products, services, product features or technology; macroeconomic or geopolitical uncertainty, including supply chain issues; our ability to attract, recruit, train, retain, and, where applicable, ramp to full productivity, qualified employees and key personnel; factors that could result in the significant fluctuation of our future quarterly operating results (including anticipated changes to our revenue and product mix, the timing and magnitude of orders, shipments and acceptance of our solutions in any given quarter, our ability to attract new and retain existing end-customers, changes in the pricing and availability of certain components of our solutions, and fluctuations in demand and competitive pricing pressures for our solutions); our ability to form new or maintain and strengthen existing strategic alliances and partnerships, as well as our ability to manage any changes thereto; the impact of a pandemic or major public health concern; our ability to make share repurchases; and other risks detailed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2023 filed with the U.S. Securities and Exchange Commission, or the SEC, on September 21, 2023 and our subsequent Quarterly Reports on Form 10-Q filed with the SEC. Additional information will be set forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2024, which should be read in conjunction with this press release and the financial results included herein. Our SEC filings are available on the Investor Relations section of our website at ir.nutanix.com and on the SEC's website at www.sec.gov. These forward-looking statements speak only as of the date of this press release and, except as required by law, we assume no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any of these forward-looking statements to reflect actual results or subsequent events or circumstances. Certain products and features or functionalities described herein, including with respect to Nutanix GPT-in-a-Box 2.0 and its integrations with third party product and services, support for NVIDIA GPU Direct and NX-9151, the new joint solutions from Nutanix and Dell, functionality and features contemplated by Project Beacon, new AHV server capabilities, AHV Metro multi-site DR, and the power consumption dashboard, remain in varying stages of development and will be offered on a when-and-if-available basis. The development, release, and timing of any such products, features or functionalities are subject to change. Nutanix will not have any liability for any failure to deliver or delay in the delivery of any such products, features or functionalities.

About Nutanix

Nutanix is a global leader in cloud software, offering organizations a single platform for running apps and data across clouds. With Nutanix, companies can reduce complexity and simplify operations, freeing them to focus on their business outcomes. Building on its legacy as the pioneer of hyperconverged infrastructure, Nutanix is trusted by companies worldwide to power hybrid multicloud environments consistently, simply, and cost-effectively. Learn more at www.nutanix.com or follow us on social media @nutanix.

© 2024 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or unregistered trademarks of Nutanix, Inc. ("Nutanix") in the United States and other countries. Other brand names or marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release is for informational purposes only and nothing herein constitutes a warranty or other binding commitment by Nutanix. This release may contain express and implied forward-looking statements, which are not historical facts and are instead based on Nutanix's current expectations, estimates and beliefs. The accuracy of such statements involves risks and uncertainties and depends upon future events, including those that may be beyond Nutanix's control, and actual results may differ materially and adversely from those anticipated or implied by such statements. Any forward-looking statements included herein speak only as of the date hereof and, except as required by law, Nutanix assumes no obligation to update or otherwise revise any of such forward-looking statements to reflect subsequent events or circumstances.

NUTANIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

As of

 

 

July 31,

2023

 

April 30,

2024

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

512,929

 

 

$

598,027

 

Short-term investments

 

 

924,466

 

 

 

1,053,354

 

Accounts receivable, net

 

 

157,251

 

 

 

225,301

 

Deferred commissions?current

 

 

120,001

 

 

 

148,435

 

Prepaid expenses and other current assets

 

 

147,087

 

 

 

114,123

 

Total current assets

 

 

1,861,734

 

 

 

2,139,240

 

Property and equipment, net

 

 

111,865

 

 

 

114,785

 

Operating lease right-of-use assets

 

 

93,554

 

 

 

96,895

 

Deferred commissions?non-current

 

 

237,990

 

 

 

204,357

 

Intangible assets, net

 

 

4,893

 

 

 

6,019

 

Goodwill

 

 

184,938

 

 

 

185,235

 

Other assets?non-current

 

 

31,941

 

 

 

28,393

 

Total assets

 

$

2,526,915

 

 

$

2,774,924

 

Liabilities and Stockholders' Deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

29,928

 

 

$

40,286

 

Accrued compensation and benefits

 

 

143,679

 

 

 

173,339

 

Accrued expenses and other current liabilities

 

 

109,269

 

 

 

22,486

 

Deferred revenue?current

 

 

823,665

 

 

 

923,559

 

Operating lease liabilities?current

 

 

29,567

 

 

 

23,884

 

Total current liabilities

 

 

1,136,108

 

 

 

1,183,554

 

Deferred revenue?non-current

 

 

771,367

 

 

 

823,891

 

Operating lease liabilities?non-current

 

 

68,940

 

 

 

79,028

 

Convertible senior notes, net

 

 

1,218,165

 

 

 

1,271,966

 

Other liabilities?non-current

 

 

39,754

 

 

 

35,945

 

Total liabilities

 

 

3,234,334

 

 

 

3,394,384

 

Stockholders' deficit:

 

 

 

 

 

 

Common stock

 

 

6

 

 

 

6

 

Additional paid-in capital

 

 

3,930,668

 

 

 

4,086,671

 

Accumulated other comprehensive loss

 

 

(5,171

)

 

 

(3,703

)

Accumulated deficit

 

 

(4,632,922

)

 

 

(4,702,434

)

Total stockholders' deficit

 

 

(707,419

)

 

 

(619,460

)

Total liabilities and stockholders' deficit

 

$

2,526,915

 

 

$

2,774,924

 

 

NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands, except per share data)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

212,507

 

 

$

255,465

 

 

$

671,619

 

 

$

802,047

 

Support, entitlements and other services

 

 

236,074

 

 

 

269,112

 

 

 

697,066

 

 

 

798,817

 

Total revenue

 

 

448,581

 

 

 

524,577

 

 

 

1,368,685

 

 

 

1,600,864

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product (1)(2)

 

 

12,430

 

 

 

8,469

 

 

 

40,452

 

 

 

28,105

 

Support, entitlements and other services (1)

 

 

69,999

 

 

 

71,150

 

 

 

211,277

 

 

 

215,029

 

Total cost of revenue

 

 

82,429

 

 

 

79,619

 

 

 

251,729

 

 

 

243,134

 

Gross profit

 

 

366,152

 

 

 

444,958

 

 

 

1,116,956

 

 

 

1,357,730

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing (1)(2)

 

 

229,261

 

 

 

245,901

 

 

 

695,271

 

 

 

717,926

 

Research and development (1)

 

 

143,016

 

 

 

159,220

 

 

 

434,760

 

 

 

471,596

 

General and administrative (1)

 

 

52,515

 

 

 

51,425

 

 

 

182,728

 

 

 

148,457

 

Total operating expenses

 

 

424,792

 

 

 

456,546

 

 

 

1,312,759

 

 

 

1,337,979

 

(Loss) income from operations

 

 

(58,640

)

 

 

(11,588

)

 

 

(195,803

)

 

 

19,751

 

Other (expense) income, net

 

 

(7,168

)

 

 

659

 

 

 

(30,696

)

 

 

(2,520

)

(Loss) income before provision for income taxes

 

 

(65,808

)

 

 

(10,929

)

 

 

(226,499

)

 

 

17,231

 

Provision for income taxes

 

 

5,161

 

 

 

4,687

 

 

 

14,774

 

 

 

15,905

 

Net (loss) income

 

$

(70,969

)

 

$

(15,616

)

 

$

(241,273

)

 

$

1,326

 

Net (loss) income per share attributable to Class A common stockholders, basic

 

$

(0.30

)

 

$

(0.06

)

 

$

(1.04

)

 

$

0.01

 

Net (loss) income per share attributable to Class A common stockholders, diluted

 

$

(0.30

)

 

$

(0.06

)

 

$

(1.04

)

 

$

0.05

 

Weighted average shares used in computing net (loss) income per share attributable to Class A common stockholders, basic

 

 

234,735

 

 

 

245,766

 

 

 

231,702

 

 

 

243,688

 

Weighted average shares used in computing net (loss) income per share attributable to Class A common stockholders, diluted

 

 

234,735

 

 

 

245,766

 

 

 

231,702

 

 

 

297,055

 

 

(1)

 

Includes the following stock-based compensation expense:

 

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Product cost of revenue

 

$

1,831

 

 

$

1,576

 

 

$

6,103

 

 

$

5,201

 

Support, entitlements and other services cost of revenue

 

 

6,565

 

 

 

6,391

 

 

 

20,083

 

 

 

20,690

 

Sales and marketing

 

 

19,383

 

 

 

18,901

 

 

 

63,425

 

 

 

61,110

 

Research and development

 

 

32,003

 

 

 

38,719

 

 

 

107,116

 

 

 

117,664

 

General and administrative

 

 

13,126

 

 

 

16,705

 

 

 

42,426

 

 

 

47,594

 

Total stock-based compensation expense

 

$

72,908

 

 

$

82,292

 

 

$

239,153

 

 

$

252,259

 

(2)

 

Includes the following amortization of intangible assets:

 

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Product cost of revenue

 

$

2,438

 

 

$

766

 

 

$

7,779

 

 

$

2,626

 

Sales and marketing

 

 

169

 

 

 

99

 

 

 

716

 

 

 

218

 

Total amortization of intangible assets

 

$

2,607

 

 

$

865

 

 

$

8,495

 

 

$

2,844

 

 

NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Nine Months Ended

April 30,

 

 

2023

 

2024

 

 

(in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net (loss) income

 

$

(241,273

)

 

$

1,326

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

59,078

 

 

 

54,986

 

Stock-based compensation

 

 

239,153

 

 

 

252,259

 

Amortization of debt discount and issuance costs

 

 

31,767

 

 

 

33,738

 

Operating lease cost, net of accretion

 

 

27,065

 

 

 

24,009

 

Early exit of lease-related assets

 

 

(1,109

)

 

 

?

 

Non-cash interest expense

 

 

14,772

 

 

 

15,143

 

Other

 

 

(6,275

)

 

 

(14,117

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(4,768

)

 

 

(49,669

)

Deferred commissions

 

 

16,919

 

 

 

5,199

 

Prepaid expenses and other assets

 

 

(33,858

)

 

 

37,588

 

Accounts payable

 

 

(5,106

)

 

 

10,326

 

Accrued compensation and benefits

 

 

2,356

 

 

 

29,660

 

Accrued expenses and other liabilities

 

 

53,451

 

 

 

(83,857

)

Operating leases, net

 

 

(30,134

)

 

 

(22,394

)

Deferred revenue

 

 

92,056

 

 

 

134,037

 

Net cash provided by operating activities

 

 

214,094

 

 

 

428,234

 

Cash flows from investing activities:

 

 

 

 

 

 

Maturities of investments

 

 

722,983

 

 

 

625,519

 

Purchases of investments

 

 

(711,253

)

 

 

(740,034

)

Payments for acquisitions, net of cash acquired

 

 

?

 

 

 

(4,500

)

Purchases of property and equipment

 

 

(52,603

)

 

 

(54,813

)

Net cash used in investing activities

 

 

(40,873

)

 

 

(173,828

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from sales of shares through employee equity incentive plans

 

 

23,268

 

 

 

50,660

 

Taxes paid related to net share settlement of equity awards

 

 

(10,214

)

 

 

(111,620

)

Repayment of convertible notes

 

 

(145,704

)

 

 

?

 

Repurchases of common stock

 

 

?

 

 

 

(106,131

)

Payment of finance lease obligations

 

 

(3,711

)

 

 

(2,928

)

Net cash used in financing activities

 

 

(136,361

)

 

 

(170,019

)

Net increase in cash, cash equivalents and restricted cash

 

$

36,860

 

 

$

84,387

 

Cash, cash equivalents and restricted cash?beginning of period

 

 

405,862

 

 

 

515,771

 

Cash, cash equivalents and restricted cash?end of period

 

$

442,722

 

 

$

600,158

 

Restricted cash (1)

 

 

2,804

 

 

 

2,131

 

Cash and cash equivalents?end of period

 

$

439,918

 

 

$

598,027

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid for income taxes

 

$

21,578

 

 

$

20,938

 

Supplemental disclosures of non-cash investing and financing information:

 

 

 

 

 

 

Purchases of property and equipment included in accounts payable and accrued and other liabilities

 

$

16,214

 

 

$

983

 

 

(1)

 

Included within other assets?non-current in the consolidated balance sheets.

 

Reconciliation of Revenue to Billings

(Unaudited)

 

 

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Total revenue

 

$

448,581

 

 

$

524,577

 

 

$

1,368,685

 

 

$

1,600,864

 

Change in deferred revenue

 

 

13,333

 

 

 

32,708

 

 

 

92,056

 

 

 

134,037

 

Total billings

 

$

461,914

 

 

$

557,285

 

 

$

1,460,741

 

 

$

1,734,901

 

 

Disaggregation of Revenue and Billings

(Unaudited)

 

 

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Disaggregation of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription revenue

 

$

417,516

 

 

$

486,620

 

 

$

1,271,388

 

 

$

1,498,081

 

Professional services revenue

 

 

22,101

 

 

 

26,240

 

 

 

67,821

 

 

 

74,083

 

Other non-subscription product revenue

 

 

8,964

 

 

 

11,717

 

 

 

29,476

 

 

 

28,700

 

Total revenue

 

$

448,581

 

 

$

524,577

 

 

$

1,368,685

 

 

$

1,600,864

 

Disaggregation of billings:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription billings

 

$

428,959

 

 

$

515,920

 

 

$

1,364,752

 

 

$

1,617,593

 

Professional services billings

 

 

23,991

 

 

 

29,648

 

 

 

66,513

 

 

 

88,608

 

Other non-subscription product billings

 

 

8,964

 

 

 

11,717

 

 

 

29,476

 

 

 

28,700

 

Total billings

 

$

461,914

 

 

$

557,285

 

 

$

1,460,741

 

 

$

1,734,901

 

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 Software as a Service, or 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 $8.4 million and $27.0 million of non-portable software revenue for the three and nine months ended April 30, 2023, respectively, $11.1 million and $26.3 million of non-portable software revenue for the three and nine months ended April 30, 2024, respectively, $0.6 million and $2.5 million of hardware revenue for the three and nine months ended April 30, 2023, respectively, and $0.6 million and $2.4 million of hardware revenue for the three and nine months ended April 30, 2024, respectively.

Annual Contract Value Billings and Annual Recurring Revenue

(Unaudited)

 

 

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Annual Contract Value Billings (ACV Billings)

 

$

239,810

 

 

$

288,851

 

 

$

698,378

 

 

$

861,870

 

Annual Recurring Revenue (ARR)

 

$

1,467,178

 

 

$

1,820,207

 

 

$

1,467,178

 

 

$

1,820,207

 

 

Reconciliation of GAAP to Non-GAAP Profit Measures

(Unaudited)

 

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Three

Months

Ended

April 30, 2024

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

Three

Months

Ended

April 30, 2024

 

 

(in thousands, except percentages and per share data)

 

Gross profit

 

$

444,958

 

 

$

7,967

 

 

$

766

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

453,691

 

Gross margin

 

 

84.8

%

 

 

1.6

%

 

 

0.1

%

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

86.5

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

245,901

 

 

 

(18,901

)

 

 

(99

)

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

226,901

 

Research and development

 

 

159,220

 

 

 

(38,719

)

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

120,501

 

General and administrative

 

 

51,425

 

 

 

(16,705

)

 

 

?

 

 

 

(1,707

)

 

 

?

 

 

 

?

 

 

 

?

 

 

 

33,013

 

Total operating expenses

 

 

456,546

 

 

 

(74,325

)

 

 

(99

)

 

 

(1,707

)

 

 

?

 

 

 

?

 

 

 

?

 

 

 

380,415

 

(Loss) income from operations

 

 

(11,588

)

 

 

82,292

 

 

 

865

 

 

 

1,707

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

73,276

 

Operating margin

 

 

(2.2

)%

 

 

15.7

%

 

 

0.2

%

 

 

0.3

%

 

 

?

 

 

 

?

 

 

 

?

 

 

 

14.0

%

Net (loss) income

 

$

(15,616

)

 

$

82,292

 

 

$

865

 

 

$

1,707

 

 

$

(110

)

 

$

16,876

 

 

$

(764

)

 

$

85,250

 

Weighted shares outstanding, basic

 

 

245,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

245,766

 

Weighted shares outstanding, diluted (7)

 

 

245,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

301,860

 

Net (loss) income per share, basic

 

$

(0.06

)

 

$

0.33

 

 

$

-

 

 

$

0.01

 

 

$

-

 

 

$

0.07

 

 

$

-

 

 

$

0.35

 

Net (loss) income per share, diluted

 

$

(0.06

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.28

 

 

(1)

 

Stock-based compensation expense

(2)

 

Amortization of intangible assets

(3)

 

Litigation-related costs

(4)

 

Other

(5)

 

Amortization of debt discount and issuance costs and interest expense related to the convertible senior notes

(6)

 

Income tax effect primarily related to stock-based compensation expense

(7)

 

Includes 56,094 potentially dilutive shares related to the convertible senior notes and the issuance of shares under employee equity incentive plans

 

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Nine

Months

Ended

April 30, 2024

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

(7)

 

Nine

Months

Ended

April 30, 2024

 

 

(in thousands, except percentages and per share data)

 

Gross profit

 

$

1,357,730

 

 

$

25,891

 

 

$

2,626

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

1,386,247

 

Gross margin

 

 

84.8

%

 

 

1.6

%

 

 

0.2

%

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

86.6

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

717,926

 

 

 

(61,110

)

 

 

(218

)

 

 

194

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

656,792

 

Research and development

 

 

471,596

 

 

 

(117,664

)

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

353,932

 

General and administrative

 

 

148,457

 

 

 

(47,594

)

 

 

?

 

 

 

?

 

 

 

(1,755

)

 

 

(225

)

 

 

?

 

 

 

?

 

 

 

98,883

 

Total operating expenses

 

 

1,337,979

 

 

 

(226,368

)

 

 

(218

)

 

 

194

 

 

 

(1,755

)

 

 

(225

)

 

 

?

 

 

 

?

 

 

 

1,109,607

 

Income from operations

 

 

19,751

 

 

 

252,259

 

 

 

2,844

 

 

 

(194

)

 

 

1,755

 

 

 

225

 

 

 

?

 

 

 

?

 

 

 

276,640

 

Operating margin

 

 

1.2

%

 

 

15.8

%

 

 

0.2

%

 

 

?

 

 

 

0.1

%

 

 

?

 

 

 

?

 

 

 

?

 

 

 

17.3

%

Net income

 

$

1,326

 

 

$

252,259

 

 

$

2,844

 

 

$

(194

)

 

$

1,755

 

 

$

925

 

 

$

49,874

 

 

$

(313

)

 

$

308,476

 

Weighted shares outstanding, basic

 

 

243,688

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

243,688

 

Weighted shares outstanding, diluted (8)

 

 

297,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

297,055

 

Net income per share, basic

 

$

0.01

 

 

$

1.04

 

 

$

0.01

 

 

$

-

 

 

$

0.01

 

 

$

-

 

 

$

0.20

 

 

$

-

 

 

$

1.27

 

Net income per share, diluted (9)

 

$

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1.04

 

 

(1)

 

Stock-based compensation expense

(2)

 

Amortization of intangible assets

(3)

 

Restructuring charges (reversals)

(4)

 

Litigation-related costs

(5)

 

Other

(6)

 

Amortization of debt discount and issuance costs and interest expense related to the convertible senior notes

(7)

 

Income tax effect primarily related to stock-based compensation expense

(8)

 

Includes 53,367 potentially dilutive shares related to the convertible senior notes and the issuance of shares under employee equity incentive plans

(9)

 

In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back $12,749 of interest expense, net of tax, related to the convertible senior notes

 

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Three

Months

Ended

April 30, 2023

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

Three

Months

Ended

April 30, 2023

 

 

(in thousands, except percentages and per share data)

 

Gross profit

 

$

366,152

 

 

$

8,396

 

 

$

2,438

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

376,986

 

Gross margin

 

 

81.6

%

 

 

1.9

%

 

 

0.5

%

 

 

?

 

 

 

?

 

 

 

?

 

 

 

84.0

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

229,261

 

 

 

(19,383

)

 

 

(169

)

 

 

?

 

 

 

?

 

 

 

?

 

 

 

209,709

 

Research and development

 

 

143,016

 

 

 

(32,003

)

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

111,013

 

General and administrative

 

 

52,515

 

 

 

(13,126

)

 

 

?

 

 

 

(314

)

 

 

?

 

 

 

?

 

 

 

39,075

 

Total operating expenses

 

 

424,792

 

 

 

(64,512

)

 

 

(169

)

 

 

(314

)

 

 

?

 

 

 

?

 

 

 

359,797

 

(Loss) income from operations

 

 

(58,640

)

 

 

72,908

 

 

 

2,607

 

 

 

314

 

 

 

?

 

 

 

?

 

 

 

17,189

 

Operating margin

 

 

(13.1

)%

 

 

16.2

%

 

 

0.6

%

 

 

0.1

%

 

 

?

 

 

 

?

 

 

 

3.8

%

Net (loss) income

 

$

(70,969

)

 

$

72,908

 

 

$

2,607

 

 

$

314

 

 

$

16,188

 

 

$

669

 

 

$

21,717

 

Weighted shares outstanding, basic

 

 

234,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

234,735

 

Weighted shares outstanding, diluted (6)

 

 

234,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

282,362

 

Net (loss) income per share, basic

 

$

(0.30

)

 

$

0.31

 

 

$

0.01

 

 

$

-

 

 

$

0.07

 

 

$

-

 

 

$

0.09

 

Net (loss) income per share, diluted

 

$

(0.30

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.08

 

 

(1)

 

Stock-based compensation expense

(2)

 

Amortization of intangible assets

(3)

 

Litigation settlement accrual and legal fees

(4)

 

Amortization of debt discount and issuance costs and interest expense related to convertible senior notes

(5)

 

Income tax effect primarily related to stock-based compensation expense

(6)

 

Includes 47,627 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans

 

 

 

GAAP

 

Non-GAAP Adjustments

 

Non-GAAP

 

 

Nine

Months

Ended

April 30, 2023

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

(6)

 

(7)

 

Nine

Months

Ended

April 30, 2023

 

 

(in thousands, except percentages and per share data)

 

Gross profit

 

$

1,116,956

 

 

$

26,186

 

 

$

7,779

 

 

$

?

 

 

$

230

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

1,151,151

 

Gross margin

 

 

81.6

%

 

 

1.9

%

 

 

0.6

%

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

84.1

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

695,271

 

 

 

(63,425

)

 

 

(716

)

 

 

?

 

 

 

(3,283

)

 

 

?

 

 

 

?

 

 

 

?

 

 

 

627,847

 

Research and development

 

 

434,760

 

 

 

(107,116

)

 

 

?

 

 

 

?

 

 

 

(1,661

)

 

 

?

 

 

 

?

 

 

 

?

 

 

 

325,983

 

General and administrative

 

 

182,728

 

 

 

(42,426

)

 

 

?

 

 

 

(1,726

)

 

 

(129

)

 

 

(38,499

)

 

 

?

 

 

 

?

 

 

 

99,948

 

Total operating expenses

 

 

1,312,759

 

 

 

(212,967

)

 

 

(716

)

 

 

(1,726

)

 

 

(5,073

)

 

 

(38,499

)

 

 

?

 

 

 

?

 

 

 

1,053,778

 

(Loss) income from operations

 

 

(195,803

)

 

 

239,153

 

 

 

8,495

 

 

 

1,726

 

 

 

5,303

 

 

 

38,499

 

 

 

?

 

 

 

?

 

 

 

97,373

 

Operating margin

 

 

(14.3

)%

 

 

17.5

%

 

 

0.6

%

 

 

0.1

%

 

 

0.4

%

 

 

2.8

%

 

 

?

 

 

 

?

 

 

 

7.1

%

Net (loss) income

 

$

(241,273

)

 

$

239,153

 

 

$

8,495

 

 

$

1,726

 

 

$

5,303

 

 

$

38,499

 

 

$

47,805

 

 

$

1,716

 

 

$

101,424

 

Weighted shares outstanding, basic

 

 

231,702

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

231,702

 

Weighted shares outstanding, diluted (8)

 

 

231,702

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

279,238

 

Net (loss) income per share, basic

 

$

(1.04

)

 

$

1.02

 

 

$

0.04

 

 

$

0.01

 

 

$

0.02

 

 

$

0.17

 

 

$

0.21

 

 

$

0.01

 

 

$

0.44

 

Net (loss) income per share, diluted

 

$

(1.04

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.36

 

 

(1)

 

Stock-based compensation expense

(2)

 

Amortization of intangible assets

(3)

 

Costs related to early exit of existing leases

(4)

 

Restructuring charges

(5)

 

Litigation settlement accrual and legal fees

(6)

 

Amortization of debt discount and issuance costs and interest expense related to convertible senior notes

(7)

 

Income tax effect primarily related to stock-based compensation expense

(8)

 

Includes 47,536 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans

 

Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow

(Unaudited)

 

 

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

 

2023

 

2024

 

2023

 

2024

 

 

(in thousands)

 

Net cash provided by operating activities

 

$

74,497

 

 

$

96,353

 

 

$

214,094

 

 

$

428,234

 

Purchases of property and equipment

 

 

(21,831

)

 

 

(18,029

)

 

 

(52,603

)

 

 

(54,813

)

Free cash flow

 

$

52,666

 

 

$

78,324

 

 

$

161,491

 

 

$

373,421

 

 


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