NTNX - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Nutanix Second Quarter Fiscal Year 2021 Earnings Conference Call. [Operator Instructions]. I'd now like to hand the conference over to your speaker today, Ms. Tonya Chin. Thank you. ahead. go Please

Tonya Chin

are we difficulties our on I having end. apologize some

quarter a Just the and second the XXXX. web second. on broadcast welcome be Investor also us call results fiscal is This to our and discuss afternoon, over to Relations Good give website being ir.nutanix.com. year call today's of accessed can of our conference at

announcing After issued Ramaswami, Joining CEO; and XXXX. release CFO. are a Nutanix's Nutanix today, Rajiv year Nutanix's results second the today its closed me Williams, market fiscal for quarter financial press Duston of

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of current our and call, today's risks differ position the periods; by and our industry management growth; our some adversely our could regarding statements the in forward-looking impact strategies and and involve including timing which CEO current and our driving of plans, transition; and macroeconomic goals, impact success results the metrics actual and model statements. During cause financial targets anticipated pandemic. which statements, forward-looking future from materially competitive COVID-XX including statements factors financial business outlooks, future will make performance, our business performance beyond are anticipated these and the of and those impact These transition; the control, uncertainties, and to trend of and

no statements fiscal update this of Form XX, our for today. to and filings, September forward-looking these apply including SEC well XX-K as after our filed our SEC description to undertake refer call. annual today release detailed earnings please a statements recent report factors, as issued as we For on these of with These obligation XXXX most press on XXXX the

them on exclude all been not measures in we today's on result, rely basis charges. our referenced, note, expressed Please use and a certain as a adjusted views As call financial to unless otherwise non-GAAP specifically have should representing you future. are the on

press of reconciliations to the on We website financial extent measures IR have these available, our GAAP earnings measures non-GAAP provided to release. our financial in and

management Stanley Technology Conference you meetings the many will investors with connect Lastly, We at Rajiv. with host with of over Rajiv? Nutanix’s call virtual turn I'll to on that, X. to hope there. March the And Morgan

Rajiv Ramaswami

you, make afternoon, a We on expected expenses, the metrics, subscription. exceeded everyone. Thank momentum good engine than and quarter less progress saw gain Tonya, transition our across was across growth, strong renewals to on QX continued in guidance to spend board. and our ACV all operating

more how time get I observations by since my Before into priorities the I December provide and about details business joining will I Nutanix on forward. have spent in going initial talking begin and the my

lead several [business]. long-term in alliances our of our has team the business constituents collaboration me channel future. and observations are some observations with in meetings on since drive December. growing us with employee to which I to customers, The with the some that of meetings importance growth. our help us priority leadership partners our many scale, has Feedback good key provided enabled critical of our include that who employees talented of to execution ahead the met strategic with core these base play including quality and the engaged of addition clarify perspective my engagement the introductory our these bigger partners a penetrate to our board at constituents opportunity with the and In shareholders These coming deep major us areas and from from with form priorities customers software, simplicity for that from accounts to get will our significant value

evolution part scale. are priorities of All the a at these for natural of company

for to our the market of drive solutions and packages we take simplification will our our benefit our and customers. more of how we portfolio products First, including

Second, on how larger as our go more to provide as well partnerships accounts. opportunities to in create we will impact focus we market within deepening more

our continue better And focus our we environment create outcomes. nurture will cash our and significant thoughts we flow that and pool to subscription talent to our and transformation a base of Third, to part fourth, well of has with will diversity business continue model business positivity. as experiences ensure workplace and renewals our on employee talent, to grow to as a a

I encouraging provide including our bit informative a simplicity. more conversations our little and with our observations boards. have let product on priorities. portfolio advisory When me many conversations, detail these love comes customers Now to and customers had it

exceptional nature transformation also They've business plans. component I and are support think our the end-to-end portfolio. Nutanix me critical that is their of told and appreciate solutions of our a

On bring our portfolio the together and that to our to easier expressed would make them us pricing our some that delivering they packaging. like for consume by constructive have it side to more software adopt solutions and simplify and

key for market go-to our priorities have strategy. We into the our built feedback

of our of channel will have component leverage subscription scale the with Nutanix we and an have process the and seen partner met During and focus partners. attended at pleasure bring a I their we registration increase expansion XX% Engaged to to software presenting had critical that the deals. business increase partners elevate of during partner-led deal global well the us partners a us as the value can needed partner improving quarter as which key launched working transformation. business partners in training they to grow where efficient the on quarter we be quarter partner the well With help event see year-over-year several customers solutions They program who as this of increase ensuring including that our focuses in number quality and on our through through enabled their with multi-cloud journey. a the to partner Last competencies volume. I transacted

HPE, other and Lenovo Our OEMS server strong. partnerships with remain

the enterprises. us complex value tremendous of hardware ecosystem having address increasingly and recognize of in broader choice selection to of large partners with customers freedom a their Our in these needs in allowing

required about customer company used quarter. For our in the as subscription provide they headquartered count partnered with our traction platform total global software, our our have multi-million see our of cases. core workloads XXX encouraged and example, our solution HPE, financial our from the provide to their data for ETOS our we been hypervisor global a We variety EMEA with on We files I Citrix modernize and value to AHV partners This XXXX their integrator and of one was leading to XX,XXX XX than more desktops our center software, deal to were our in selected after adding now and solution. virtual dollar global services by the by XXXX base. users. with customers customers companies that are systems one-year deploying the

AWS Azure both these to We continue progress to cloud our to maximize partnerships and on and how integration to exploring are public relationships journeys help multi-cloud. our with with and their customers

about is in are but days prospects. excited its Azure still with early we its partnership Our

We relationships will integration our focus on in deepening area. this and

Finally, mentioned Work the I base. in Place with surprise diversify to and I of Area that in at named no efforts to already opportunity that Bay in been Great us all strong XXXX see quarter. an both Workplaces there speaking their was I to our delighted employees levels. to that Fortune the I'm talent have had the talented India area with pleasure passion. advance for this to employee is is in during have the of impressed highly Best Nutanix It's me and many company our A

addition, on our and increase disclosures. focus related In we will ESD

and we Now as more well let execution color me the on opportunity provide talk saw of in momentum quarter. the the front market about us as during

and are how for majority HCI that During managers on of from to across on the migrate how infrastructure norm the IDC enterprise part HCI market now ease reports of multi-cloud. a quarter, clouds analysts industry IT for or or the released its repatriate create consistent cloud, the highlighted experience premises and hyper-converged management. to can platforms a whether or an multi-cloud potential premises public all strategies plan workloads to in large concluding

In expanding a from assistance world. software their a of the quarter They as billion a of Systems five-year set new multi-cloud on orchestration on HCI XXXX. emphasis noticed $X.X in capabilities through set for such footprint that workloads HCI to during its addition, with Gartner are organizations enterprise CAGR a raised XX% XXXX wider forecast of

some highlights record our included ACV about growth this which performance products. We XX% emerging provide delivered of quarter. me year-over-year from billings let notable Now strength coming

and than a will we to disciplined OpEx going continue Our expected our less OpEx approach managing was forward.

renewal shift deep tumbling Our with term thesis to licenses driving reduce benefits average to cycles. continues of the out a shorter economics play to and better

pandemic will various we impacted in and line our in into said, industries right our operating A year differently. to growing verticals the this we both costs. success getting continue be critical As have top reducing see and the to

we to healthcare state resources as face focus enabler. with innovation headwinds saw demand their are there that the While the To and from local that some number in strength and services, a financial the have end quarter. sectors and government transformation IT on and industries

Our a XX% over a basis. and rate Files emerging on and XXX% particularly quarter had year-over-year our quarter. was up storage a management attach deals products solution Era had our file product solution Emerging database rolling ACV we a strong to four

our of are XXX We have that the nearly the Fortune emerging half fact adopted by encouraged products.

are fit We've Era competitive a momentum early purchases from is seen see for forward. solution Our and us repeat and I who market going enterprises showing great as differentiator this adopters. large

a solution our in journey who solutions their have execution. software company to as quarter and sectors a dollar that purchased clone count Era and differentiator deal. databases clusters in XX fit Nutanix last the get competitive core the an a their focused the new remain software infrastructure requirement. EMEA; across are has well takes. time and One developers the on to multiple as using provide consistently sales a We bursting private, manage to of in U.S.-based of single services on customer large XXXX quarter. provision could to particular as Era mobility manufacturing to current a clusters a telco, have company and customers Era recover and top environment. Era this now and of to hybrid for they now example single that go-to-market existing its retail global looking continue This us app is a in They the platform they multi-cloud. increase finance, as pension customers. one and and saw Ultimately and interest the workloads their applications quarter refresh so solution become database replicate building hyper-converged growing tier their solution their They in in Nutanix fraction We multi-cloud three the for AWS of productivity launch we and options clouds they multi-million selected workloads customer their ability were financial to multiple our is to since enable management services environments,

with is are which progress part leadership. Chris on We our so reflection pleased Kaddaras' far in a

this sales lower quarter Revenue was at demand promoted in our progress We're events the also costs. the global leading year. virtual performance significantly marketing including across organization digital During for material gen and Chris board productivity last Chief to Officer overall after all seeing the

benefit is price of test our year We and drive proved best the see when over also to from continue increase which past rates increasing trials conversion an where number isn't to used. to seeing compared sales has

encouraged We efficiency. will momentum to go-to-market focus we by on are our continue overall and

business which built as common cloud are help becoming platform work. increased even of for enterprises new simplified hybrid offerings customers manage rich into object models. to We Ransomware true multiple even and the data teams to new with Recently also The hybrid and Ransomware new security, help prevent, against and recover both detect continue and stack recent multi-cloud new cloud enabling add cloud remote IT the to a and and storage announced tiering more to protect all and natively object These of storage, Nutanix's features include network files environments. file recovery Nutanix our objects effectively moving storage management attacks our files. customers to data attacks features operating our to cloud capabilities release for closer we across in storage innovate disaster capabilities costs, simplify result for against services continuity

quadrant We recognition for one recognized magic all to and in solutions by share to our again our infrastructure receive and hyper-converged the the pleased with share. in market software for a continue execution year are QX we was in report. number Gartner their market Gartner for the hyper-converged and our HCI share a best when by saw released infrastructure Also share position Nutanix market as row for its In leader we numbers and fourth were and external once for compared increase year-over-year. market ranked vendors in

the of is vendor new view hardware IDC's view space. not the is new in the by influenced addition In leading Nutanix market the software-defined software-only sales. infrastructure This factor in

leading its I our run our on help north next to how of services and and to our open, Let will on achieve invisible outcomes me growth that phase multi-cloud Nutanix be simple, conclude and vision reiterating customers. freeing manage focused We of customers We am their star clouds excited with mission business and with which by remain focus execution. into our continues of software vision. a delighting believe to build, to be us platform data hybrid customers application any making and

macroeconomic half that confidence to to year much environment. lie and more our key I'd storage multi-cloud into more the June including our details in in very performance. turn the the all is I our in of in details Day data balanced strengths to areas use software I about easy our sharing Our momentum continued our for the on to global experience second journey with to now Investor XX. significant with it optimism designing over financial you services. forward going cautious look Duston like of about have and for at Duston? expertise

Duston Williams

Thank you Rajiv.

quarter our adding in outperformed environment team guidance and at environment an the we our took in uncertain quarter macro QX sales uncertain before consideration operating while quite time ongoing expectations transition. into Comparable are our same provided executed the macro the Our we we and ACV that last well for clearly backlog. to the quarter amidst to

be for time proven better forward efficient shorter renewals. to term and an that deal we to As thesis leading business a the first more gradually continues compress ACV out our will focus lengths look economics low-cost to

mix we cost business to percent the go-to-market add As of low-cost our will of a it total eventually significant structure. as believe our increases our renewals leverage

seeing shared a that emerging sales also typically our of we the focus plan on expected shorter products lengths term previously I putting renewed are compress based which term lengths. ACV have of slightly QX. in We result which sales compensation have

years term Our average and in QX. QX down length X.X X.X X.X from by decreasing was slightly

small early We with the seeing. still are renewals the of we subscription QX. a sample the encouraged quarter are is and the by while that process relatively We and economics size retention also pleased build are during record currently we the still in in amount overall rates deal we are

to to low-cost one-year of to deals sign will ‘XX. increasing deals. renew an of FY in continue We These pool number add the renewals available

ACV. for important an to outstanding quarter execution we play to on play with related products As those our based summary we as in in continued thesis deal emerging continue individual previously an during products quarter, our had the expected. in of our noted improving out most Emerging products so role economics our generating to QX strong record the business

we half with As we of year remain our to-date. move second our very progress the fiscal into encouraged

the reflecting we growing ACV $XXX had growth QX million $XXX Run rate of X.X XX% driven on move total QX, end $XXX average QX billion XX% of length essentially guidance were from In Now compared ACV, and significantly to QX, year flat above versus term in ‘XX. million of to ACV Revenue approximately our renewal guidance range ACV XX% by decrease I million. our XX ACV. $X.XX million QX, was was year-over-year a growth. as $XXX will to some record of highlights. billings financial specific new year-over-year

Operating gross million expenses non-GAAP less $XXX versus guidance XX% to Our of margin were and $XXX rose down of than in million. to year-over-year our XX.X% guidance QX million our XX.X%. $XXX

efficiencies. reductions spending We from overall continued including to benefit go-to-market

$X.XX the loss a for net per or non-GAAP was of share. $XX quarter Our million loss

our overall quality. year-over-year pipeline as well also We continued a quarter in in the pipeline in improvement as good increase saw

Our our linearity was one outstanding most ever. in QX linear of quarters resulting in

expectations. flow with linearity was investments for closed and was This better ‘XX free in billion of slightly short-term aided were coming Our in ‘XX. million. DSOs linearity at cash by and QX we XX our down in X.XX quarter days by good significantly XX driven good in from QX, QX down QX performance the $XX billion days also cash $X.XX negative than

billings guidance for XX% follows. million of and XX%. year-over-year be Weighted decline of approximately representing XX%. of representing X%. Now as turning average between margin to $XXX million. of outstanding million our million year-over-year ACV to The is QX million approximately $XXX growth and Operating expenses between $XXX guidance. ‘XX QX, X% to $XXX to a Gross shares XXX

few a a ongoing modeling uncertain guidance continues conservative Now assumptions QX the environment. for our bias based have on to macro small

the the QX versus year-over-year in decrease we in of similar seasonality QX the guidance experienced [straight] quarter XX% a expect at last with billings over raise while the so on believe in per and lengths dramatic range communicated seasonal continue its that X% billings slight current by run the in growth are to XX% X% we to XX% reflecting X.X have quarter-over-quarter grow term QX, we of same strong guidance ACV QX in Based estimates. to our to will quarter see change ACV last going rate the we ;’X years ACV growth two to we from fluctuating mid anticipates a and As forward. time transition trend point or now not year-over-year. terms We our in the

to year-over-year reported to closer revenue billings move we As expect stabilize growth to growth ACV length term over begins time.

a and what which the in our operating expenses not our for From fiscal now fiscal QX. expect the increase uses cash in typically spent is We $XX come free to QX in million to QX in perspective prior strong expect also flow we experienced cash therefore liner ‘XX less than up we with year. liner in

current our [indiscernible] expenses approach uses Our will QX. likely numbers QX case most for

terms the set beginning the at our billings, to include our We and and rate term efforts in and the website on a historical of total management billings overall to modeling internal your continue length with our year. And fiscal exceed ACV we our model especially forth are and light continue our with compressing ACV, bridge billings. to guidance finally in to IR cash help earnings our for of pleased located convert billings future presentation to how ACV trends run on plan current

With for of We you FY of through the this the that end continue level up could you. include call ‘XX. operator please to questions? Thank open will detail

Operator

ahead. first RBC from Instructions] Please go Our Matt of Capital line comes question of Markets. [Operator a Hedberg

line Your open. is

Unidentified Analyst

Thanks Matt and aboard. Hey it's some based your here that Hedberg. to Rajiv Dan from initial you after tour stood on there's looking taking things welcome your listening questions. Maybe for our past really experience. out

Just curious thought here? logical or logical of you a step inning next if you that second see

Rajiv Ramaswami

really making vision Happy around and cloud take cloud to world see customers multiplied the that to that. purpose Nutanix increasingly invisible, to operating analyzed are a our I the what are is is complexities we growing customers business to vision expanding computing our stream up Sure. focus and highly of on had invisible portfolio, and here invisible making outcomes. the make

you when HCI as and earlier to market very to look are that growing leading said we multi-cloud alone the at core they is on-prem Now extending CAGR Gartner. according market focused market HCI our about itself that XX% at

our free and that to investing then everything making all packaging as into world. solutions focus our this first other as I hybrid And network if can built going you to is about areas partners focus but continue an even driving to talked to a to there So get what's the also like of least and we we we've talking the and a earlier our our think about and take leverage and simplify leverage in do terms in in the leadership on there's and strategic we of of continue as leaders again renewal cash and engine be discipline that's in how efficient multi-cloud HCI the class channel the extending me the to give shift cost partnerships I making that we to because be ask end we today for renewals opportunity journey and this market we a and really cloud that do break to management also us we a not within sure and and would focus subscription citizen product packaging us sure have last treating fixes that market. flow really we been think would

Unidentified Analyst

quarter of for That's very great, ACV maybe strong Duston. dollar decrease billings for slight second value in here quarter And helpful. then third absolute our guidance results. the

more in the remarks, quarter-over-quarter? that mentioned your help think decline of us You but prepared little just you could a

Duston Williams

Sure. last about talked Yes, call. as earnings mentioned, we you this

big we roughly something very And If it's X% a, guide to you consensus X% at the it's and expected. coming year-over-year was just but came look The we a quarter messaged a for delivers and the within but we two big roughly look it's this this at back so, to at high-end increases if on outpaced decline, a we there last QX's or X% the you off completely set our XX% obviously guidance X% those itself, in to growth, look off X% so raise. it QX, quarters. decline by last a QX, X% what decline, $XX I million the expectations, that XX% to think

go million operating substantially and than loss, again line, will your do from the up, $XX model, less we your $XX math -- be revenue dollars to be million down look delivered profit expenses you will when will there math your bottom you below If additional is for consensus that will million consensus topline come the there's do -- there. we or $XX the the below gross

we're really So we that we how delivering position. and did, feel good And QX our with really exiting feel good the feel QX. backlog progressing good about guide about we really we

and then guide feel that you comfortable add pretty it's that I something So up, pretty think a when [indiscernible]. all we strong

Unidentified Analyst

for Thanks insight. great. the That's

Operator

comes the Huberty Morgan line question Stanley. of ahead. go next of Kathryn on Our Please

is open. line Your

Kathryn Huberty

quarter, was afternoon, Good year. as Yes, thank the well for fiscal lower OpEx as the in you.

or And then you breakeven positive? areas business you talk the might and about about cash Duston scale maybe be Rajiv, think of back those versus follow investment just that can goal the in up more Thank able if and that you can you. you savings to toward So talk whether the march of rationalize are as structural? you temporary flow

Duston Williams

learned part first combination ever like as will of there, on that. of again a from we things is obviously much spend really we've we I benefited and that we travel different Clearly, past, efficient. operating have said do much we've I great all time, got But Kat. focusing back the travel over and expenses forward. we'll in a we've now It's both. think don't And Rajiv do going can On on as been efficiency. things travel can view opportunity we've There a lack differently, that that, on think more learned having things will talk this about and clearly the come

If period. year-over-year -- at a kind last outside average this but we of, which about on current grew look year, years three was, years, COVID take three-year the year, if -- a but for expenses of FY the 'XX, you three XX% three the you look prior at

So we've lot of a got resources.

has this little FY renewed focus you a 'XX those efficient? here Now resources get I'm the market you focus efficient, for more that's not follow Rajiv to go-to only and how be 'XX is, do the up for bit. do that. will Rajiv trusting we see a what want FY model the And How there'll more table and but that and brought we maybe to on year, get

Rajiv Ramaswami

Duston. sure, Sure,

when start at it's in we that to pretty of on efficiency, REIT look marketing. the where we respect are and that side good sales look around In the but remain R&D I first terms of at with sales think at marketing fact with inducting and you are on largely. efficiency and feel really that areas, the I point, newer slightly some marketing let's at

spend a has In to virtual. by and from digital there. taught be whether But our gained far convert demand go form, more been and then events on been blessing being in what cost some just we've and generation in it it our And more our think the feature with us it therefore a offerings to buying. be to customers efficiencies Drive, Test ROI if virtual that actually of us try recently growing and and there trying cloud bit a we which to better tremendous that forced efficient fact is introducing virtual, allows COVID because has I more

And the people they conversion have place been ratios so Test there have much used Drive, haven't. than higher

together our we of in marketing to we doing sales ACV So more -- out post-COVID world, The this even in efficient still it, new these all and fundamental thesis two one. make side. number of come deals. that on that's is largely put are are as the starting here Number

lifecycle. very renewals very, term Our still early are license their in

we As new process new engines to an renewal here, is cost cost where sale start kicking of lower in, the going for the are in of building customer efficient acquisition much the renewal be than of ACV.

these Investor OpEx by June. perspective So help that we'll our at the Day And should more about an way as well. from talk fundamentally the sales this side of in

Kathryn Huberty

so Congrats great. color. That's for quarter. on much the the you Thank

Rajiv Ramaswami

you. Thank

Operator

next of Our of go the Ader question line ahead. William Jason comes Blair. from Please

is line open. Your

Jason Ader

comment guys. on for Hi you, Thank question I've you. on the Duston duration.

been assumption You anymore? end a sort on the to that three see then you I like that? down. think X.X mean, that doing had you correct the you're modeling out us dramatic you by deals deals and would with of I guys one-year one-year continue will mix trend down fluctuation it of of more Could would increasing help if forward. guess, continue to said, I what's I going Is duration Did And get we'll call years? to 'XX. that see not not

Duston Williams

good X.X could it there it at be Yes. X.X, there No, X.X X.X a or kind so there. mentioning it's around X.X, your so was somewhere When And I I is you're still of point. per then quarter. could think be

here to of kind saw probably per perspective, push we shouldn't term point a general, I a there. I or of drastic But stabilize. federal in think begins maybe from little whatever, there so everything and but is did one but main that think from know quarter kind there be just it think could this a initial QX, the now, it point or flat, And in you quarter think it's bit quarter-over-quarter changes forward. going be I I

is So I your X think still the ballpark. in

Jason Ader

then the great. with five in Okay, -- know company, that look Nutanix, to long kind years, help over I on on-prem like is how word next where you of it's think ask guess, get of the kind bad wanted tech], history? if people I comfortable the, Nutanix -- a thing kind and Nutanix other issue this some So And companies of that's do have and [horizon you, but that Rajiv, I a right? more and at this side like is of investors infrastructure with kind of, on-prem right an you that's of I

Rajiv Ramaswami

think in is market world. a that no doubt in live are multi-cloud I going the customers Yes, to there our

are I really it's years. away. doesn't really will market HCI making that include growth is infrastructure. cloud all we in first They still had multi-cloud clear grow there. on-prem, going forecast of that the our and with are on-prem we just not as And the are stopping think And by mentality. Gartner a much, our investing right? -- purely at not but Again equally five XX% way products a So Now see lot customer the over that on-prem next they saying

offering, the announcements anywhere want, terms helping type of of some single use some infrastructure. advantage right? With product public recent any the are license You are that the to multi-cloud their they and choice our customers a we their can core here so cloud of Clusters, play I side long-term with recent a be we that -- we our it'd extending steering in on-prem deploy provide whether that have we this saw our us with that announcement and So long-term And in or saw in public natural from workloads storage into cloud, objects in we world. the has customers is offering think operate of fundamentally, we have. that of files, that buy sustainable

Jason Ader

you. Thank

Operator

from go Our with a next line Jack question Needham. of comes ahead. Please Andrews

open. is line Your

Jack Andrews

on happening you behind the helping us Thanks we strength to afternoon. for taking -- is in drill bit you strength? drive -- Could Nutanix educated or the you what's on dry a of they flush are understand who to bigger all products. longtime happening fully more products. good if customers that the your what's wanted you down these Could scenes, you -- that Hi, I feel just help capabilities it land what's customers out see, my Do achieved the is are emerging new help question. could maybe channel going Nutanix? these on

Rajiv Ramaswami

add I'll as Yes, this. can well top some of and Duston on give then color you on

them just selling a look to HCI, solution differentiated these products and attached starting top saw very us portfolio this are to our first of many platform. broader product billings more emerging products so strong Era, record nicely them and all quarter having And of demand of needs were of have mature right? and emerging Flow. So a which core customer core multi-cloud our increased drive quarter. Files with Beyond satisfy The to all allows

comes on that file because -- people new find customers right? us storage, as opportunity for and Nutanix now new the File insert deploying up and past. of in right? platform So core help core So our the security, actually we just significant platform. example, that they customers that the haven't preference management Era when are with deploy And database, the used can of going have flow, a if top, platform will security part it. are

some new to are actually Duston So our these and cases, deals emerging open any products do add accounts platform. they color? other in in when attached Nutanix core us can help existing to you cases want new

Duston Williams

you No, covered well really I think there.

[indiscernible]. think I that's

Jack Andrews

follow-up that. perspective light more strategic importance as on And could the on was Rajiv, regarding you the just of wondering comments a if question, for some new you shed alliances your who thanks Well, maybe your helping looking could perhaps think you types partners? among with existing different relationships, of Are you Or do and you larger help really goal? penetrate engage that to accounts? I achieve

Rajiv Ramaswami

HP, there. set then Citrix, this also at that Then partners about got who We of we we type continue bare of deepening of to workloads. got all cloud there, a lies partnerships together like Lenovo, stack a developing of partnership. technology all our emerging deal opportunity coming right? would be this partner, talked Citrix, partner Google we've further AWS which that ain't metal. an technology accelerate to the really our one we've we crucial, of are And I and HP, technology we've already. talked selling are Azure to our go-to-market. and for of solution. Yes, deliver think these burst that partners, others but really Google all have selling also categories, room think in on large greatest key point, partners, that Nutanix the and it's of with I'll won For And was ecosystem an Google desktop that this is break ecosystem together, OEM right? about example, They're three and I top And the many quarter desktop-as-a-service again, across the with we with got core partners,

think taking I to like we've I these solutions with across building partners technology and more partners, cloud room market. of got said, together So each partners, to be OEM solutions ecosystem, these,

Jack Andrews

That's Great. on helpful. Congratulations the results.

Rajiv Ramaswami

you. Thank

Operator

of Please comes Alexander Kurtz question of ahead. Markets. Our from go next line the KeyBanc Capital

is Your line open.

Alexander Kurtzs

question. prior Thanks excited to welcome next Rajiv, my Analyst breaking is know for What comes Day. and taking the here. your company

software your it to you of and activity expand Test not emerging lend is at focused a sold the high of comments then like kind your, is the core beginning on the end there the through hyper-converged envision kind infrastructure low -- just of delivering are said model, Could where of Drive, Rajiv rep, where then in a space at the done type very -- competitors traditionally premium majority you expand? a of, that's reps Just there? a about type and very at Nutanix from lot through as -- of that coming of downloaded process earlier sales it's a sales ramps the level, model and future touch

Rajiv Ramaswami

service are heading we're what prospective to customers, definitely Yes, that zero trying with a Alex, you With I exactly mean, do it's this, Drive Test for direction in touch right the is right. self there.

we out to themselves for need us, and a right on, that reduces sales see that them, there, our but they're really When allows by early what and tried and would with right? promise. time. to and then exactly they out in process over Drive touch go still selling So them for engaged it to the like convert there days is then take that themselves right to then It's from go, do Test high a

this, to on complex [indiscernible] as now I well. going Now can for of we mean, have simpler take this for actually sales hands will to solution lot do offering selling so work a I think they're

us think way efficient time to a more So again is this get our with sales. I we great expect over for that,

Alexander Kurtzs

Okay. Thank you.

Operator

line And our next go the ahead. question comes of Piper James in Fish of Sandler. Please

Your is line open.

James Fish

to just you that? in first but XXXX actually -- of kind January talked saw Duston, to Alex -- guys. linearity, strength what Hey, what about the good follow-up the you like understand becoming and to congrats CEO Nutanix did linearity and -- congrats with on said want and much budget you in you And Great year-end on was due with over I to to welcome forward wanted flush? here. But calendar how Rajiv, and of versus saw to the to actually great working XXXX more ask, looking

Duston Williams

we was and when or pipeline. we're close? were deals don't always I mean, We out unusual really in think those question not thing saw sure mean to had in not that. get large flush, those budget planned things many I'm whatsoever. I budget the like really pieces I Yes, year-end advance close of The there but And going you "flush",

So label normal. is it I than from any perspective different would the that

James Fish

then And follow-up. Rajiv, helpful. a as That's

priority any types first what the demanding mean, kind Nutanix could that from mention but but really see I customers we like Files around I there, know, in coming consolidation the what Era, and customers sounds you did the are solutions of early, and sense desire. bundles Nutanix it's On are having wanting? kind it months? are bundles part more Flow of of to kind of

Rajiv Ramaswami

Thanks, James. Yes.

So be that customers. use going it's around solutions on cases for to and

So mean, Together you're then specific run core AOS, here with about users. and enabling is Era together subset use deliver AHV, we've as a a That's talked right? to to them. as a which for solution for portfolio clearly databases of example, you that our going could, comes critical remote for on workloads, our virtual if I case set of running and a good databases management Mission that. for solution manage top desktops

the are a cloud, sets it cloud our we're what hybrid focused clusters. with and tied AHV to and examples If be customer customers to hybrid will So looking then buying like buying. that, on a directly going they to that solution be are at is journey AOS,

to we So that's plan package how it.

James Fish

again Congrats sense. Makes guys.

Rajiv Ramaswami

Thank James. you

Operator

your Northland Capital. open. of Next go is of question from comes the Nehal ahead, line Chokshi Please line

Nehal Chokshi

questions. Two thanks. Yes,

And get then I new is I between guys also Duston, ACV new understand of to billings to ACV be the you the think remains renewals out the for quarterly do you bulk capacity? incurred ACV ACV and ACV? sales of split how us actually continue ACV new can Can much force? say give existing more First the your the know largely you you renewing that that that new billings. actual going

Duston Williams

split. Yes, on the

split the a really leverage P&L renewals perspective. specifically XX% and about of basis, talked is the about an XX%, talked actually haven't as which a leverage, We XX%, TCV on percent where On TCV Gartners we've ACV basis. a range, from

into pretty some giving for get flows. FY we're you macro, in from 'XX those FY now, into would changes our time. that what at that really 'XX and some small good still so quite we on we And Investor FY perspective we've certainly So profile views that's it's about as start still been you then 'XX hope Day of talking renewal

of what to would renewals. start are of for TCV. there renewal. the insight percent a between to Now be from things a more we're the really we retention good when bit, a think above, and know to we of little profile think, cost under of you we rates ACV, And little renewals, up view give and the have percent upsell community to couple providing try investment Obviously, I importantly, the new understand quarters it starting

of to So a more we're and which a on have we expect working Investor kind that TBD Day. is wholesome now, discussion during something

force. coverage, hire sales is, account existing a people sell reason to to good the sure whether Chris to enable geography right that's is vertical bit more in base people, or them productivity chime you let There right really we I'll too. those they a our hire the for able and that the to productivity be job of of trying in get or done the here the On once make to base. side, have environment perspective, quite should Rajiv But has no answer base

So that's ongoing and from that. said like getting partners things more leverage as and Rajiv

now existing view, our get would mean, is exactly I out force So are [efficiency] sales the on more do of here. massively productivity focused we which too that

So, Rajiv, too. you might of there couple want to a add thought

Rajiv Ramaswami

will you makes productivity covered, earlier we about in call it And there and the that increase our the what thing drive deal upsize about if right? think the helps products I of solution solutions review. sell industrial help broader portfolio the sales [indiscernible] aligning customer again also add talked consumption I'll a by only second, No, also it's things, portfolio. It

Nehal Chokshi

recently -- am Yes. more change specifically cloud which the about, do base. Great basically believe thanks, a in HCI actually you environment Rajiv seen any thinking is and for to you comparison their cloud, that I updation have and pivoted linchpin the you hybrid I as

guys changed all? at has So, competitive the you dynamic that for

Rajiv Ramaswami

do the industrywide outcome as a showing is pieces that think statement number that's to IDC been fine our market. the at hybrid share continue we competition focus statement. just perspective, perspective I in case a would will new, is not foundational the always are mean, for market one cloud. best XX% share just from agree us year-over-year do as we position. the for I I that HCI there. independent about a as solutions for think I And with the that Nutanix the not I I point. where our say that's is the Gartner And right. competition. customer. platform we of good is What competitive good best particularly and feel to from customers, at look shows of happening delivering always anything That's roughly us increasing market long a on about an

Operator

Our ahead. Goldman go of question of Hall line Please comes a Rod from Sachs. next

is line Your open.

Rod Hall

linearity seen for good the guess, I Duston in start the we've wanted quarter, on job [indiscernible] to on that. sounds Yes, like linear out you, a thanks it it's good question. called but five know really it's DSOs, for them with really I I quarter, b, so you if dig on then got little of leading bit the if you level guess give a I follow-up. on drove And of just from sustainability wonder kind on you DSO and that that? can into I've a more that, linearity color could I us a, what any years,

Duston Williams

good Yes, on efforts way had there. think control of I in there. the linearity had gotten good DSOs, we've any DSOs, in never the we've always always They've out and really

now I was at, always they've XX think been So great it whatever. about days or

going and can not But collect not it's that's just linear there we a possible. do you ship really in best go This QX. stay like Rod, linear at as if going as was look much quarter, as QXs be it past continue the the good going we'll to It's as as not obviously now there, was quarter, linear QX's, to it's way goal. to and just will

the Now kind is is, that as going indications QX of, linearity for early expected.

question? we your there, nothing there bounds look part sorry, perspective. what QX the second of at when out was So from And is of I'm that

Rod Hall

what -- the just did was of something kind in situation linearity I it that just the drove I you guys execution? different wondered circumstantial from there quarter, whether or

Duston Williams

things but quality amount no management fair maneuver ACV is sales based top the you discipline with quarter down go of the things and has seen quality that the will, doubt on comes right? that like and And we've gets not the having pipe, with pipeline, comp to and reps that There with execution lot and of if of every and it comes execution, always it only and comes Well, of to amount a layer good pipe. then the give go better pipe up that, optionality, At pipeline day a end more comes of you execution and the improved. the that that.

but it I broad reasoning, So a it's always with execution. starts think

Rod Hall

follow-up a it Is have I Rajiv? for can and Okay okay?

Rajiv Ramaswami

Rod. ahead Go Sure.

Rod Hall

well has large where been up side see do do but think Rajiv, But could the large-size, competitor a a spot from to VMware of seems with not a in wondering you you kind Fortune is? forward. Nutanix just just vision of these Yes, looking on you Nutanix sweet maybe picture, really curious, what customer terms comment if future where big niche enterprise XXXs. for of the for point tough view in a Nutanix is

Rajiv Ramaswami

we as Yes, And I I think you clearly, historical say Rod and a enterprises. strength would smaller had indicate, medium what

for XXX a as we've would good what well, customers. like -- also say penetrated our of of sweet We large right? on cases, say as are not everything, there. use we platform the larger terms in specific is although customers, yet that choice the we that's get think amount XXXX of able count there these customers to top we a if I would of winning focused the But to like are spot. like quite global global are I But being more we

environment, for yes that global, global wins these was very with focused So remote users. we example, the on desktops and virtual but highlighted large this quarter okay complex

would then are [indiscernible] thing to at see say one what used, a footprint, Go, the we we actually Now time. build there I one opportunities case use and right?

the into able other the we're get in solution customers. market, that Era go I for way come a fairly also a opportunities But market. I are why in customers. where there top, of is, to about we've they're new in to earn to these lots in, able So a we is some penetration would example and players go the go -- way to penetration unique the use it, potential going in I there then, got represents it's marketplace the what mean, Management the think to here are I under to say have our areas at Database into market and And are as right, think, there and in you're that's

Operator

Our Mohan Please of the go question in Wamsi of comes line America. ahead. next of Bank

open. line Your is

Wamsi Mohan

have can has company some simplification share around you some customer on your part and I expectations the the first color color thank of made more And the a joined you was from have you. Yes, what said maybe follow-up? on the you the Rajiv, as differed portfolio point you of that feedback?

Rajiv Ramaswami

an we've HCI bit management platform. years. quite It's earlier. first think around the we've core covered a see it and we've ALS Files around Yes, that, being the that, these disaster past [indiscernible] no few right? security of and one we products got I But got longer really grown I has little we've opportunity more over got portfolio on to are together, our which networking got recovery. and Optics, AHV Our

as then and frame then got we've and so, for desktop-as-a-service we've And got Era.

So we brought and portfolio -- they as carbon, for you see, can containers then example. with have at

sell to an So an solution, of I cloud individual what desktops. a opportunity market. mentioned together if these native a as each I somebody of okay, mentioned is put to in these There you product deploying virtual is into see, products the trying workload,

our workloads. customer to cloud that iOS about for plus that is sense for makes more together packaging by becomes Now deploying native, a cloud consume object AHV plus, let's solution. carbon platform a making talk that storage easy whereas with turnkey somebody a and it native of And

see repeat we market. kind can for part of drive two So use that? that you in think specific that the and the I go was cases we of could sorry, packaging simplify question, What

Wamsi Mohan

your Yes. joined you What's the company? as expectations been from different

Rajiv Ramaswami

passionate say, resources, the has talent. would it's limited very in I think and ton strong product the resources, largely the team of surprised on the with strong, the portfolio I still talent, a side. Yes, And on there's lot -- pleasantly actually done very talent upside, the very especially company, a

good, in pleasant no of product strength feel it's the forward. good makes I making a saying been surprise me for it they're and is along. been do there to of then, execution portfolio going work me we've on that's realize of journey front as ahead very focused surprise, that So lot upward on for us really a about the And subscription this a all terms and

Operator

call today. to see Thank that session Nutanix you for you. Nutanix XX scheduled investor our June A And Q&A an has that there. would and conference concludes day for and love reminder

You disconnect. may now

Nutanix (NTNX) 25 Feb 212021 Q2 Earnings call transcript