NTNX - Earnings call 1 2024

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Operator

Good day, and thank you for standing by. Welcome to the Nutanix Q1 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Rich Valera, VP of Investor Relations. Please go ahead.

Richard Valera

to XXXX call financial welcome quarter discuss and year fiscal results. afternoon, today's to conference first Good

Joining me today CEO; and are Rajiv Ramaswami, Sivaraman, CFO. Nutanix's Nutanix' Rukmini President and

announcing Nutanix After closed financial issued first quarter a results. the fiscal today, press market XXXX year release,

like please the If section to Press the website. IR our read Releases release, you'd visit of

results During These which risks actual involve some of differ forward-looking are could management our to and these make which statements, forward-looking adversely anticipated will call, and statements today's including guidance. control, beyond from financial materially by uncertainties, cause those statements.

description For for a XX-K, our more risks these detailed filings, report to annual of the refer fiscal uncertainties, our including SEC and XXXX. please year Form other ended on and XX, July

release and of issued after apply as undertake we press this forward-looking revise earnings statements call. These our these today, today. obligation as no to statements well As

views. our As a as them result, representing on you not rely future should

on Please note, except to specifically financial are referenced, certain for been all unless we otherwise on non-GAAP charges. have basis today's exclude revenue, adjusted and call, expressed a use measures

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

We Conference events. in to James these the X. Nutanix X will be see participating York of TMT in and you one City the Global hope Raymond Francisco, Technology December San on Consumer Barclays New at and December on Conference in

call And to fiscal XXXX that, Rajiv. second quarter will the on January Finally, period over with our begin Wednesday, I'll turn quiet XX. Rajiv?

Rajiv Ramaswami

The compared prior in quarter in quarter good ahead We was that we first with came saw that quarter. solid uncertain largely and a backdrop, everyone. first Rich, you, unchanged, the afternoon, macro Thank of with our guidance. our results delivered

quarter, the metrics, cost prioritizing guided closer transformation, ARR revenue first optimize look year-over-year exceeded exceeding grew at were billion total $XXX their However, solutions all million, the we infrastructure $X happy by we time. And our a initiative. to to steady our and their of we for ownership. quarterly our digital looking delivered Taking of to modernization have demand first rate businesses And driven record billion. run $X.X for XX% saw annualized a

quarter We good generation, our was of a flow aided quarter another start fiscal free by financial had first linearity. year. strong cash strong Overall, to our also performance

quarter, vectors, Our additional Federal expansion one was new net first and business for adoption capacity wins exception. X capacity workloads our our several typically additional We all no and is portfolio different including agencies workloads, for in strong of with across products. saw this of existing

also wins our public customer cloud the The within and included for win deploying with introduced a existing customers. expand turnkey our GPT-in-a-Box, a expansion this wins of our customer, important AWS. diversity into We with with first to our as recently breadth solution large the to generative testament AI. and ability NCX view And for largest our

a Management Cloud its departure including platform, business-critical and applications. to dual as-a-service. run centers. containerized Nutanix our data leveraging from automation was chose new their Cloud who future agreement, for win and Another in expansion as quarter Bank of modernization Asia with XXXX build-out Global initiatives a Pacific a notable the significant sole historical building multiple They strategy. Nutanix Infrastructure their Nutanix for region. This their vendor customer the This selected was simplicity in signed the planned platform

businesses. largest demanding and in their managing throughout this databases, most also see organization. grow Nutanix with of world modernize as the to our Service We great as a Database and they They companies ability partner deploying their adopted and the for look win example to their

available our joint I'm to focus. partnership. launched be partners, with past early excited by made This our And this towards Cisco our key the from recently sales generally forces. leverage seen with Generating sold quarter, progress end, remains a solution both we've was

We who this also planning of previously new for Which offering. to secured been few were customers good conversions customer saw had interest a purchase wins and Cisco's HyperFlex.

seen While partnership, early so far. we've it's encouraged days I'm still by what in this

development front, North a capacity positive first or on in the was signed with increasing This Service deal its expansion we Managed was quarter, Nutanix of American the expected the Another partner MSP. related partner a handle to Provider its significant business. growth

as seeing are traction partners. win this we see We our reflecting MSP growing with the

strengthen defend recovery quarter, a These new of On from attack against we on within to ransomware front, one-click unstructured enable Cloud begin Nutanix announced and damage to this features All further organizations detect important process. a the product the enhancements minutes threat, exposure. its the platform data. capabilities to XX

leader most build reflect Forrester In Research of report industry in protect enhancements to sensitive investing the data ongoing the These quarter, in and platform. Nutanix strength recognition on for customers' secure from clouds. across our latest in as this platform we our recognized commitment a the They continue platform, area. Nutanix the to receive being Cloud Cloud to past our

view as our report. one X named in as We of only this leader position companies, a

in strong a As offer position the competitive market. reflection,

rate an flow and $XXX of million to year discuss a many of calling to recent and compound 'XX. long-term large to were growing free vision We for fiscal on XX% in generation annual able 'XX in provide it update happy approximately our million seeing you Day. pleasure be $XXX through year and of fiscal was applications provide our portable to growth of Investor Finally, our enabling ARR of market opportunity person an targets at cash to

the targets it hand We've feedback so to I'll And Rukmini share. drive and Investor far that, with to forward Sivaram. look from Rukmini? over received great Day our we towards to and continuing vision

Rukmini Sivaraman

rate ACV of growth of XX%. 'XX quarter year-over-year commentary followed results, $XXX will fiscal by end the was $XXX million I guidance first QX our a provide range QX million Rajiv. for and the and high range 'XX. QX in guided all the above metrics. 'XX you, in 'XX exceeded on the QX we $XXX million, year was guided on which Thank billings a of good to

was The partly driven range QX $XXX Government than significantly rate by and the which from guided stronger-than-expected ACV million to in performance million, million Federal was $XXX of in bookings. a outperformance business, $XXX higher our grew year-over-year growth U.S. year-over-year of Revenue new XX%.

performance year-over-year was was years, U.S. contract saw renewals and has the billion, to continued ARR rate modest line the elongation of XX%. duration. quarter. mix year lower in QX average a growth lower Federal we quarter-over-quarter in which Average our cycles, due duration with a to be contract typically expectations, representing the QX good. to of X.X higher business, $X.XXX ago largely Government quarter, slightly of at also sales end Our Similar of relative to last

Non-GAAP expenses of XX.X%, margin higher than our to due were factors X% XX%, gross leading million was than guided in cost expectations, operating revenue. partly higher-than-expected margin due goods higher operating of a to QX Non-GAAP Non-GAAP mix our of lower-than-expected XX.X%, to in revenue sold. QX. $XXX in range and QX higher to was

Non-GAAP due and net free on $XXX XX%, share, in AR than cash expectations, of was to EPS XXX flow QX. largely booking diluted per better-than-expected flow implying cash Free based of revenue days million in QX higher fully average familiarity. were margin million, in income outstanding QX and shares. our $XX was shares ending XX approximately of Linearity on million weighted DSOs, based or good, $X.XX was

from more first months and are billion terms We expected. since the days, And in X $X.XXX of investments our typically $X.XXX billion, cash, cash of the up saw payment to quarter. and a QX bookings in equivalents We QX, larger-than-expected in bookings XX were proportion XX than ended collected the of of QX 'XX. short-term billed with

August, Under began repurchase Board QX, we authorized of of through repurchasing our end shares in the a plan. share XXbX-X at program, the by Directors

Given portion QX. the repurchasing shares market authorization, the the timing in we of only for a of were

QX. Moving on to

operating for million, ACV XX%, $XXX revenue gross XX% XXX billings follows: million diluted $XXX to as of shares guidance of XX%. QX of to Fully $XXX is $XXX margin of of margin to million. outstanding million 'XX XX% shares. approximately Our million non-GAAP Non-GAAP to

Revenue XX% follows: to The range. year of XX.X% $X.X cash of XXXX, year-over-year full margin range. as $X.XX to $X.XXX year of of billings the margin representing of billion billion $X.XXX midpoint year-over-year the the free updated flow XX% the of cash Non-GAAP operating midpoint. representing Free of Non-GAAP million at representing XX.X%. at billion, flow guidance growth margin of billion, the growth ACV midpoint to at for million, is of XX.X% XX%. approximately $XXX of $XXX gross to fiscal

year updated is provide 'XX guidance, This will fiscal guidance 'XX guidance. higher commentary fiscal year fiscal 'XX than previously year I our across our some regarding additional metrics. provided now all

new environment. we and uncertain the seeing our macro continued are expansion despite solutions, for First, opportunities

continued sales previously, mentioned we modest average as of However, we to elongation see cycles. a have

dynamics. impact and expansion ACV new outlook 'XX these year fiscal from macro assumed Our some performance

assumes will guidance continue business the well. that Second, perform to renewables our

in a fiscal 'XX, expected renewal to or is available that but to year fiscal reminder year-over-year. is 'XX, at year on pool, a while view. pace It in reaccelerate growing grow And current our ATR our continues slower based to

the assumes average compared to flat year be fiscal to Third, slightly would full lower, contract guidance year duration 'XX. that

a As our of billings. continue grow renewals to as percentage

year full of to X the ACV the not is quarters, with billing the the X that of reminder than durations year. billings contracts A sum due ACV less

the about sum be lower ACV X% We X billings. billings than ACV full year of to X% the expect to quarters

reminder A be in expenses 'XX. on few impact to that in slightly includes QX, Based we fiscal tend less QX trend QX in for as view, all the our similar full of to payroll the the operating calendar year higher thoughts QX expect the or else fiscal Finally, in saw we equal, more being year versus to seasonality resets to metrics a line on what be to taxes. QX, of current remainder year. top relative

please top bottom for In our results open year. operator, closing, raise and that, line QX we to With guidance the fiscal full our are line the guidance and pleased exceeding questions. with for line

Operator

in question [Operator of be our first from coming for JPMorgan. And Bora Pinjalim will today Instructions]

Pinjalim Bora

was your customer This hear on Rajiv, surprised is the Pinjalim, I GPT-in-a-Box. to for guys. congrats quarter, first

seeing to see so surprised uplift in a this -- what that's GPT-in-a-Box? ACV? add customer Or in think the bit A quickly. actually are do we Is signing a to this about up How Are kind an questions, around pipeline? of something using to color maybe What in ask. they environment? new dev what just more of little you number doing company going deals looking production should GPT-in-a-Box? of is similar more with I'm test So, a

Rajiv Ramaswami

GPT-in-a-Box. for inbound It's good Yes, days well We're partners. question. from early actually Pinjalim, still so for interest seen we've ecosystem as -- prospective customers, thanks as the

along for GPT-in-a-Box. patterns, right? is potential the a were we documented use criminal for win looking are cases land to with A what use cases And of have Federal we've do did we first Agency. cetera, Now that looking It et lot that the about. lines of for activity, document, sell talked

for the this line particular was agency along do. that's to And what looking

really to going early offering still us. it's point. early meaningful our a At to from Now be perspective, still on contribution an when numbers. days comment it's very for It's this to

And so a Perhaps say this worth see that's little now. might of how makes what a GPT broader basis it on about we I sense. for can that market us, recapping bit be

I parts that on around to us, Investor companies at said new platform. our look this And customer there, are at it: for at Lots AI again, new first I've Day, X this So is. think I and data looking run applications. going many sort of our there's particular applications landing the AI, where Lining but like applications of is others.

to -- types data are in GPT-in-a-Box That's the And but fine the first and They're specific secure in the to can applications. private our help the their cloud for others to new train as as from provide public be some for piece landing well those them be a we will both with going in and to do turnkey locations, of solution model tune platform situations, cloud, of inferencing. be example. of And terms sensitive. for in data, going

example, The own to that, telemetry gather insight. making we products of customers from analyze for And and course, better. is, we can of use that about we get second lot do, AI our back-end a

We have product a around operations management.

In fact, call Operations. AI will product that

cetera. of the as and a operating the AI to such there's planning, operating it make environment et environment capacity so optimize And lot behind again,

second the that's vector. So

customer using and it make internally our more are service more us run the starting on vector inside the for out, is third itself that automate we end. And efficient processes company, with things more example, really to --

and Still that's of us again, broader But engage. interest a to for So continue picture. lots days AI. Gen with we'll early

Pinjalim Bora

out of the channel, have Understood. the obviously Hat of do as Hat. virtualization that One on play in you we Red for its We that opportunity. follow-up. kind kind with partnership been have go OpenShift VMware has you of -- a thrown with opportunity strong hearing Red technology, kind you after see competition both hat of VMware How the

Rajiv Ramaswami

Yes.

they, Hat I each thesis for OpenShift this modern providing other . the app platform Red underlying I actually a partnership, for being we In -- original platform. an -- the infrastructure very the mean, being well fact, b, and think that the complete complement was from perspective, development

And as they VMware with against compete so we on infrastructure from their compete side. side, application perspective, on VMware the the

partnership was very perspective, from our side. synergies the So on that good good

Now of banks, that wins customers Nutanix, seen we continues. we've OpenShift including for have well platform. several as GXK on example, the Nutanix on GXK OpenShift here seen running top adopt with And

So it's doing to synergistic forward with relationship. good a We look them. more

of this bank I on OpenShift they're running that a Pacific, mentioned, fact, DXK Cloud good Asia So example in particular in top was where our platform.

Operator

from Fish coming of today, next Sandler. Piper will And question Jim our be

James Fish

a more little wanted build the to last Just it and ask directly. bit off one

has competitor's and officially from least. raising shacks bit we've But does in you've Broadcom just About the here of maybe kind actually seen pipeline. now of look contribution acquisition pipeline to could maintenance closed prices our the over you guys little have significantly. VMware at -- walk like pretty talked us a them quarter. that the What You what them heard this already about channel through

walk So forward on through opportunity? little going just can us a detail VMware itself seeing on pipeline Hat of you're Red bit the more just you outside what the

Rajiv Ramaswami

good what Jim, given And closing. For course, question. sure. transaction with very the just of relevant, happened

the we transaction. So that some consider BM even deals implemented be to I additional this would last quarter, close did by Broadcom

the win GXK In fact, was that that about, talked to back that influenced transaction. bank Bank, certainly again, we this by going

As forward, strategy was be a single going going but it strategy, we it's vendor vendor a mentioned, us. dual to with

primary every the even deal also of these all be for Now the is news. and right, motivation timing the compete magnitude day, deals of we And unpredictable. can bit the nuanced attributing a also acquisition before because

is they but -- certainly contributing. So

about risk. have but customers don't that And increased have closing. many those multiyear a of recently, ELAs we've be continues evaluate the of signed have prior expect closed support to signed going Now all transaction, potentially Clearly, et immediate terms lot of of to timing we deep for potential for stuff cetera. to dropping in course, impact concerns to talked some in the that that time levels, an forward. us certainly the around VMware, with some pricing, the gives pricing options There them past,

good these from opportunities, and we have fiscal concerns. it's a guidance So we and continue of in to year. engagement to predict of factored influenced and this significant we with pipeline difficult benefit It's into some our by that prospects a magnitude growing just by this driven and for degree these transaction, And certainly timing of expect events.

James Fish

easier to to months Or partnership larger into to at installed Cisco Very certain it's wins But little sell a substituted of or mean and helpful. hear larger periods think of way the a kind -- in. Understanding in. already surprise accelerating, up. evaluating are that the picking times of any about customers sell about And on the of we're X bit with if were base. I HyperFlex mentioned the base renewals understanding, within renewals the more HyperFlex guys you there you that get are those if there that base? kind

Rajiv Ramaswami

Yes. our I this last solution all, of think -- Cisco joint with happy quarter. first that we we're mean, became available I are

course, Nutanix are converting now sellers either or in selling HyperFlex, are forward. over them the with deals very those Cisco deals, where it. So -- field, had both them it's naturally close those the going they're initial winning already now to simply was to of and was won And ones

part. of one that's the So first

X months right? to us, I a close of expect X go to for huge new don't that we our mean, respect deals takes pipeline, with to But pipeline we year. amount Cisco So know really, this

then some that beyond. into continue year We And and guidance factored growing and expect expect to next our we year. this fiscal that we

Operator

Our Matt Hedberg next of be will question coming RBC Capital. from

Matthew Hedberg

guide, of a especially Really uncertainty well. Rukmini, quarter have congrats the solid you. the I question macro for And my I'll as and environment. offer given

it's of strong in part the the renewals and noted You mix. bigger becoming quarter obviously, a

as some side are just double we more more of it. been But in renewals I the I'm little wins where about of step it's of and know that, obviously, of a call, can curious, you on well. bit new just story? aspect business business maybe the late. the a business you click back On the new talked of new But sort

Rukmini Sivaraman

Matt, thank you for the question.

also maybe So what you just maybe then trends about if Matt, think we versus to, alluding full a your performance bit . so talk about little on about but talk year, to I'll on. the and QX point were QX,

line overall expansion had bookings. performance growth good across ACV specifically combination talked our was new of specifically, our business. outperformance nice Federal Which by we driven a sort and execution QX, that, or business. a year-over-year and top significant and within of in really new about U.S. So really our And in expansion

that in So we benefited certainly was QX. something from that

our Now year, about, compared factoring and our and expansion some for little whether we expecting I is talked we in terms -- fairly puts some things benefits takes environment, are from about, are be talked Matt, that so ACV Rajiv from we're some upon fiscal outlook. the happening of improvement and benefit competitive in to One benefits, on. what's factoring that full into from we've new new touched the think, that performance, 'XX. year in a just We've our Cisco partnership it like the in, some

exactly the to macro. there started going optimistic is that uncertainty of the how means time, some that sit it's for about. the have play also Matt, you the your say we're harder in out. us things and just same So here At Which is year as we excited and question, rest to

performance for things some into expansion the are new year. our of the factored we've and those So

renewals the pointed we right, to predictable given range, coming those as as I and be when for GRR, more percent out, I next you portion up know the transaction. of say, business, just before, in the think will said much tends XX-plus our is are renewals you

part to predictable perform so continues continues And and to well. be that

and of hopefully, so And sense gives revenue expansion. that a you

Matthew Hedberg

Maybe helpful. are And margin gross has the Super great. a strong factors double biggest ask one significant click like If to been performance The also, really you I guided what more. margin. of obviously, QX you could some gross gross there margin that driving improvement? could

Rukmini Sivaraman

Yes.

I'll that then Again, more and Matt, points a think on start maybe sort and gross would make. talk QX I of QX of guide, margin. the couple So I the broadly with

So slightly margin in that revenue for QX, on in also because we attributed lower. gross we beat coming we our a led coming to outperformance of higher, mix of revenue. But course, COGS had factors

Now in there few there, were Matt. a things

that as last we're why call think take things, were guide, gross we sustain I up I XX%. believe but out of approximately happy it we our margin first we year the take you mix factor which quarter and to XX%, full to would which singular will of number, said gave a is approximately happy when we one up some to and

say our would folks our I it's different good mix has COGS for execution funds, is it our customer and of that on portion support I few are support reminded there. in teams just So like a of a a good

costs services there. have in We

better take to few some see were different as of And dimensions, well. across full so happy guide to year a the and margin that across gross we do

Operator

George coming of from Barclays. will next Our be question Wang

Unknown Analyst

quarter. the on Congrats

quick ones. X So

kind cash purchasing flow given free better-than-expected guys given just you stocks. just generation, of Firstly, started

how cash going terms high-level to model plan in free any given forward, of better Just just share curious buyback, profile? the kind of

Rukmini Sivaraman

Hi thank question. you for the George,

in a was that August. we've that my begin prepared mentioned from did XXbX-X in through by did authorization -- under -- Board I set had we our shares approved of as repurchasing that up. So we And program QX, we that remarks, the in our

we you'll of repurchasing And $XX.X Due the market with about portion the tables time. during only for see of a out in that shares, release the timing million, financial were we in that we put to the authorization, spent the QX. that

and the George, a variety on the just market of So timing the to we of prices, portion amount factors, including for on. will continue spent stock repurchases and of million. $XX.X a QX, future so in conditions And depend

won't wanted a but QX, did get terms on of at in color acknowledging what you was I specific it quarter. give only too so outlook, portion of for a And we of in I to the least bit

Unknown Analyst

Great. Okay.

Just I follow-up, a quick if can.

comment slightly in Just improved can backlog? absolute kind talked Last backlog dollars on you of you year-over-year. quarter, about

into you guide. 'XX factored the kind of FY As

if that terms the Just any latest in of the to sort have curious factor update and any you backlog into close guide? of would latest level how minus,

Rukmini Sivaraman

give Yes, on you color happy to some that.

used to environment before. to But typical this and perspective, in some is macro we remain over in a usual. QX fiscal the as of talked wider course backlog uncertain of from outcomes we this, be some is consumed expected where an than for expect QX, So backlog as be about the is seasonally range as possible year, things fairly like

And to backlog as continue grow, absolute also of over increase would the we number dollar time.

the So some a few backlog backlog the different think yes, But expect year some factors typical in is and as we over well. to QX, of I used for as there. use we course QX,

Operator

question from Our of Cikos Needham. Michael next be coming will

Michael Cikos

that Congrats Can ACV some U.S. better there's know cycle seasonality give to what the big Understanding to U.S. Federal. far a strong with the their back be size the that is of Federal and as revenue get billings year-end. wanted or cited a I as just you us to is overall good as of to specifically on ACV we're contribution we when quarter, that a would outperformance. far the or comments sense, for component as business? billings? the But describing revenue to how probably flavor

that is view? light, those in items business? if X federal to linearity are also, shed -- Is U.S. know it the I cited some And the stronger the Or is you could that back you tied it improvement during your quarter. independent improved -- then are

Rajiv Ramaswami

can crack I go can Rukmini Federal at piece, first take you a for the the So rest.

Federal we don't vertical. have we Health as at have in X look, So Care verticals, we but what U.S., that's say another have verticals, have I the exceptions. is, And lastly, and we

perspective, from portion of our a So business. Federal is that significant

in fact have is verticals it, there. typically exactly X of for out alluding it broken And is there's strong Federal. also important on it haven't terms I seasonality team this or Rukmini as the percentages. here. for But was given of us. focused to is that X a We quarter the it mean and course, we

to of kind on we what that's can have say Federal, the you about So Rukmini, comment linearity.

Rukmini Sivaraman

Yes.

So we mean flow, on the XX-day have there expectations we Mike, because get what comes is of much the payment and in, important the is X. we X, linearity, in have month And to month after reason bookings that's some X, we month how terms. XX- soon cash invoice right, for we booking, invoice free

And in expectations so compared that QX what to in. we our is going saw

proportion bookings their outperformance fiscal of So larger And X month and Government well. we year-end, right, U.S. the year has saw spread X. been September. course, Federal as in of there's a month And end come had you're Fed in those their

So in that likely factor that. a was

collected cash given, that driver in again, get invoiced right that bookings cash bookings, we expected, -- free had significant than in more was we of the we after previously which QX. we a was the what meant from we were so And flow performance QX

Michael Cikos

operating we that the been. sell in margin is in also strong guess to a see I'm is guidance that ahead were is then XQ more the where revenue the that specific had happy of gross other side here where I look, today, and had, models But just to Rukmini. happy could coming if this the take see above Understood. have to the coming I margins question we the -- I

you Are guys think OpEx embedding positions? you about that to guide? targeted But it that QX And open I'm in is the one things at is in Like after that? on it to a being relatively OpEx the guys wanted the of XQ of backfilling flat that I putting go-to-market last implied looking are initiatives? pretty QX, couple potentially we now the from how what ramp the OpEx, quarters. material more hiring should maybe has are that just Is see focused pickup you or

Rukmini Sivaraman

Yes.

this a the fact So the we guide QX QX, year that we talked sort last our call, related invest as call, to continuing points the on OpEx full for Mike, drive we've taken And plan out some that is, the Investor few of approach but well. improve as margin first at on the while saw Day we to about sort when growth, year, also profile. on initial of to idea one about laid that's of that talked we to continue this last and in we to you the touched

so those we've started in continuing can -- it you imagine, And general, to takes And as we're hire. investments.

And sort to in as as of of leads of imagine, increase sort can you QX that so folks an more board. on the come

other and That that also our year. on we were raise full all OpEx. you to for we for of year X 'XX, piece this bottom pointed of month January. as the for QX. course, both to and out, which resets, is That said, have that an calendar means the script QX X in the be that to of of is calendar guidance alluded The only able year in as reset this payroll my has I in line But well, line like effect month all taxes and pleased, top

Operator

question And Suppiger from the Erik next will be JMP. coming

Erik Suppiger

they you cases customers are talk the for? chat it particular? What use One, reached department level using said kind questions. the secondly, last extended then elongate. sales box. you've longer? Is And what are some Or cycles? they in they in quarter? had now longer? using specific they've that that that time their GBT using are of X with getting continue cycles either Congrats, still it consistent is the about customers with are to it to how Is a Are Or of just getting actually

Rukmini Sivaraman

one. Thank you, then and maybe you the can Yes, the Erik. GPT-in-a-Box I'll first take take question. Rajiv

or elongation, cycles, was look average QX. in increased less script, in you in average sales my QX year-over-year sales that the I a few more on some at quarters. in last on modest QX, cycles it longer increase But what has the as In So basis. it in we're right, if sales said seeing same gotten QX, was Erik, comparing a to

it's elevated. to it's what's lengthen exactly early not And in that's QX. is here, we to but like it year-over-year, happen given uncertainties it's to remains but what -- of sort going talked going again, about, this quarter-over-quarter, So focus saw -- to continued all the we've hard

Erik Suppiger

Okay.

Rajiv Ramaswami

Eric, its By GPT the not GPT. Chat the So GPT. way, on

So out But again, saying of X want are it's this just all cases trying there on cases the to typically how use right And the use now. X A pretty we figure that by caution to early. are GPT-in-a-Box see. lot AI. to GEN people section, use I

of a That customer . classic chat, course, is that's one. use case. First, service includes

The to bunch second from with document having for do whole data, is documents, document of of document information analysis, retrieval key operations example. search, a unstructured

I second that's use a So say, the case. big, would

third as That's providing use for multiple pharma developers the is prevention. generally researchers would detection for -- software verticals. assistive broadly across case these example. use fourth fraud to And or case and use the services, The example, fraud things are co-piloting, classify I would third case. And or

think water cost Services or our be Federal ]. it [ whether verticals, Financial to I Retail cut these or tend or

Erik Suppiger

options? spread cases that customer question talked across about the you is service. use those Last Or X the the of this point? majority different is at it Is of class

Rajiv Ramaswami

are happens say fairly I across. ourselves have this within example, internally to say, presented now to "Hey, all in it's of the it's can But to It's now It's for service one, say say, it's the that early, here. actually versus still Nutanix. case one across are broad-based I would use right the stages forming those spread one very customer just, we be -- other. "Hey, trialing we would we say, X. I And

Operator

Morgan will Stanley. Our of Meta from coming next be Marshall question

Unknown Analyst

for on Meta. This is Karan

first understand environment XXXX or conversations activity? today. hearing customers I terms And in terms on sort in of guess you what question, are But just RFP a So of just a guess budgets? of challenging in customer I are what from you're pickup any customers those seeing hearing you from I it's budgets,

Rajiv Ramaswami

conversations anything are specific say we with customers. there's I wouldn't in our seeing

inside AI look, how modernization I I their in be they're can Every companies. still in this their conversation on their call efforts think, say certainly, using digital they efforts. I investing have, customer would

us, budget grow And faster solid would trend a that. in other on everything from haven't say, least, they money. they're that, there's seen want are that growth. grow specific faster software spend than make They for than IT willing I would will that do. will I to any are So than we to sure there's spending think and a within say spending probably still modernization and customers But ROI TCO GDP fact I there the perspective, probably good the case general, at business

with right? cycle, for causing sign more which sure before to may there's additional an inspection, still They of what the in And elongation approvals, certainly forward up but level there want they're projects. is be moving example, projects, make is the on they

Unknown Analyst

That's follow-up. helpful. a then quick And Okay.

that it guess is just Or at color opportunities Sort share taking there? VMware share of to I at of the share time. I gains a you of some maybe the guess gains Analyst more shares bit take with than are will any expected? these Day, customer started you place. greater these take of in seeing share are -- mentioned you're With opportunities around as little opportunities the each see just sort or more just Or bats. place, over the

Rajiv Ramaswami

Yes.

VMware vendor VMware. example, to vendor what a situation at a with commented sole and perspective. users from to I How as of we are a second in bring that a win? from a lever we the hard the they, pipeline or predict opportunities point those on prospects. of get think think as will engaged a where we much Again, it's in But we are us deal overall I portion significant still will just Broadcom have for or better growing negotiating

for and term. long lot there a predictability of there's of the uncertainty lack So

the So this for timing, might when example, we've happen. focused for all

we why and and share that the it's would -- level that's multiyear exact gains are -- be some it's we forecast going going it's But into unpredictable. be our here be So have year bit again a a share for guidance. to we've in -- I the going to emphasize going timing into modeled gains thing the to incorporated for little be of here. us And a to

Operator

Our question Bollin Research. coming of Cleveland next be will Ben from

Benjamin Bollin

what Does share the How like? ACV Rajiv, I Awards. process about does that? it rate? have the they how I XXXX full looks deal? pilot? that time, Global as commence the any it color for a a data ramp run at Just long evaluation, Financials Could on little centers? about And that a wanted build bit over get ask the was to Does And more you then follow-up.

Rajiv Ramaswami

Yes.

this. been So a the doing, years, for is legacy classic, customer was been while dual And renewal, presence, growing they us. centers been this expand, And now. been migrating parts. over this a And we for time, were had many they've for so I us, particular with a they looking years, vendor from for a to they X-tier while us HCI. they've were of where they've significantly Bank, they've to has going coming also were mean, course, situation and increase both traditional for And They -- and multiple bank And for a been in Asia infrastructure classic many a on Pacific, was data the go to modernize. what GXK customer it that had had their and due their they VMware. going

them, get and for said And pretty an a along a us, this to over renewal, substantial once the with GXK customers, for do the other expansion we've they're to us like them do us generally, happy was for expansion. in -- door, we with expand with with time. So time they

of or the how XXx data I some much over it terms think in was you like Day given Investor XXx we've at is fact, expansion In life.

on similar, this they happen additional was what They that. they then particular were about concerned side. now bank liked would that were So trigger comfortable have us. the right? this They with other And

with us they went the with they So vendor. sole as when do a did expansion us,

how sort it played for out that's us. So of

Rukmini Sivaraman

add Ben. can that, I to

had I isn't there to ramp just evenly on year. a the ramp. a typically, And up, think question sort within of ACV they're you clarify,there contracts, spread are

would the calculate this of of That's any ACB like most be TCV by we transactions, transaction duration. how the total and we contract our it a divided So amount typically given transaction.

Benjamin Bollin

Okay. That's great.

I'm The That's it of you programs thoughts this these more strategy awards. other the have potentially curious, geared are that go-to-market your MSP around share for about partners you some Do Rajiv, deal? me. pursue to any specifically by item, efforts? you Can talked alienate about

Rajiv Ramaswami

broader that's your thing Yes, here, Ben. specific I and as MSP think here questions a that's an well both again, in -- thing and

on traditionally, to So market independent the I to because MSPs. mean, area of specific, us, big have for we the had want through we more transaction. route MSP a not do This an was that a in

and expansion So standard MSP these recruiting come up . they and of building the this we've been an something us for with with last on quarter done And now significant a board as more is particular of our years, where expansion the last the us. opportunity that a to was presence example And couple small of partners. continues. had good in

not concerned, do with partners I of So that think VMware partners. the transaction be the customers only includes to the happening, that are that it's also there's MSP and but their going

we So MSP the Nutanix platform. recruit -- trying so customers more on to and other to people the partners, are talking them like to just with of

are MSP I young still, route when is market. we would say, comes this to the so And it to

And get a that. time these our [ lot more so over board and as recruiting we Nutanix do and we focused MSPs on And that potentially need add have partners. ] there's enabling has to on team a partners recruit

Operator

of from The coming is next from Bhattacharya America. question Ruplu Bank

Wamsi Mohan

if seasonality. It's address of at here America. could you actually Wamsi Bank I guess, Rukmini,

growth. that you're I'm be bit you calling to midpoint is down down X that's years, towards also seeing highest lower seen QX And seasonality the is little for to historically, way, the the in than fiscal over Which you is 'XX. calling last X% guidance several at similar revenue QX around That view which we've to little wondering, X the this the lower seasonality QX but Your last the lowest or bias are upside. years. for the something a causing in bit macro QX just to the actually is a

you wondering share color Just could if any there.

Rukmini Sivaraman

Wamsi, question. the thanks for

One, across things a than in and a about dynamic. one. QX our would So of few beat QX QX on bit ACV revenue given talked say. higher the at to the I expectations, course, We came billings,

based still on So think point, QX, into look wouldn't guidance, that I that as QX see. right, I going to too to seasonally think, read higher our relative to much dynamic. than I your we

of about And we the all is then we're just pipeline various note sort what factors gave already. color talked based now, on right QX the and seeing on the to reason we've

discount as the said to that ACV billings full line. year relates we year. we the some given driving X X that in of a or it the quarters are contracts with remarks quarter just for things annualization as each at about I'll that less top As the prepared again, than X% folks, is X% the And remind do well

of the onset. our following happy but the year billings also a too to give pipeline. seeing regarding say, caution So overall, we're is rest than able raise we've solid ACV an in I what macro into factored of And folks this the think how I'd quarter, wouldn't plays I much our seasonality that. guidance, we're other to to seeing right, read -- this given first overall, overall, we're 'XX on I point, wanted some in update some be out

Wamsi Mohan

what's booking and that -- normal quarter. beyond you was about the delta you to When of the is a say the primarily flow full appreciate you What normally Or just you flow I linearity would in over overachievement what fiscal that cash driving XQ? have color. Okay.Okay. of clarification. what on of free overachievement the -- the cash sort And free cash year sort called is are think is would expecting achievement? was increase? And in XQ flow free

Rukmini Sivaraman

question, Yes, Wamsi. great

thoughts. X So

of on don't QX, one quarterly free course, we, flow. guide So to cash

we for overachieved of sort we much it. did specifically to able how give you not QX but our expectations I'm flow, free cash own So overachieve

QX. on And beat had say that, will in coming addition for as higher, I ACV right, a given billings we the well to number billings

but guidance. helped, And the QX, significant a significant free flow impact a part a year outperformance in did the is factor for think okay? was So have QX. the I around in that linearity free that on the question second of your full cash cash So flow

you correlation able year as number. of cash is the course, our from top that know, has that billings line addition and high fact we raise raised So to guide, with billing were full a what And there the very free to say right? in benefiting flow, I'd

working management the So previously improved expected. capital some that's see we're year from within to from better somewhat But expecting X factor. also than benefit Including linearity.

cash the is as that year well. to free guide helping full flow us raise So

Operator

And from the coming next question Simon Raymond James. Leopold of is

W. Chiu

Chin Simon for is Victor This Leopold.

Regarding the are share use shifts VMware, and and with customers dynamics where both instances there Nutanix? competitive VMware

Rajiv Ramaswami

both and think Nutanix. use A again, how lot VMware I clarify, use. customers And to they of just

of have hypervisor also these -- works over VSX, -- have top -- are a the Nutanix hypervisor, And a some also Nutanix. with the on just their together vendor to mean, of together of customers do VMS they have VMware included dual with that's hypervisor, we VSX. own so deploying our work Nutanix There's billion users is Sometimes we I some. in strategy. from years, lot migrated who many platform. of ESX They'll

look we entire they at are back In hypervisor. in interoperate XXXX. continuing fact, XX% the workload of providers. committed we Most those And of came the to years, nicely a today, customers, high hypervisor spectrum VMX our own workloads those X again, I very of over VMware. would across have if about are say, with you to up now and Nutanix on with just migrated our But

of premium And a providing so our -- the customers. customers about choice have choice. have They for it's all

the with So can customer. fully. It's we interoperate them, to up them replace we

W. Chiu

into are kind that discussions okay. with kind dry that, assumptions is of visibility built that along or into forward, some your what the and happens? what plans assumptions into powder going with there their are shifts -- potentially And of of Okay, of customers? kind built share you that that come Is having is kind your

Rajiv Ramaswami

to have into a materialize. our to predict hard for how them a what going leverage deal big just in we better see happens There's of things we become from engagement, be, things hard we full and to how lot Do some the we'll these a the a the factored guide nothing predict right? to of partially do other them but we to win Like of we these are to point and or year, have said, get on it's ahead side. timing do engagements this so And It's Yes. fully? win win time. and for

we how timing to plays have to both degree the And predict it's each So which see they'll hard and customer. out for to out. play it

Operator

Q&A the remarks. I over to go concludes call closing to This the turn ahead. would you. session. Please for like Thank back management

Rajiv Ramaswami

I don't think closing have remarks. any we Do we?

Unknown Executive

you. conclude No, now. call we I think Thank the

Rajiv Ramaswami

you. Thank

Rukmini Sivaraman

Thank you everyone.

Operator

joining Thank conference you tonight. all call for the

disconnect. all may You

Nutanix (NTNX) 29 Nov 232024 Q1 Earnings call transcript