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Nutanix issues solid Q3 preview but also yanks mid-term targets
'A new company will emerge from this pandemic' says CEO
Nutanix has decided some of its previous financial targets no longer apply and tipped off investors that its Q3 results won't be far off its previous predictions.
A statement issued on Tuesday said the company "expects total revenue to be between $312m and $317m, up 8 per cent to 10 per cent year-over-year". Previous revenue guidance for the quarter was $300m to $320m, so all things considered the company won't have a colossal miss.
Nutanix forecasts both total revenue and future billings based on total contract value to reflect its increasing number of subscription clients. Guidance for Q3 future billings was $365m to $385m, now revised to between $371m and $376m, so Nutanix's floor has lifted even as its ceiling has lowered.
Co-founder and CEO Dheeraj Pandey seized upon the numbers to declare: "The recessionary macro environment makes our subscription transformation and our delightful zero-touch products even more impactful, as we enable our customers to be resilient, prepared, and productive.
"Our business is taking important strides in digital prospecting, virtual selling, and remote work. A new company will emerge from this pandemic, and this quarter is just the beginning of that."
He added that the times may well end up suiting Nutanix as more remote work creates demand for the company's multi-cloud and automate-as-much-as-possible approach to enterprise infrastructure. Pandey said the company has already noted "an emerging tailwind in VDI and DaaS this past quarter".
While the company seems content with its new guidance for Q3, it has pulled its longer-term FY 19/20 and 2021 targets citing the uncertain market conditions caused by the novel coronavirus.
Nutanix will formally announce its Q3 results on 27 May and they'll almost certainly deliver the numbers above because it's a rare company that risks investor ire by making an early announcement and then missing that goal.
Investors liked what they heard: Nutanix shares popped by about a dollar, or around 6 per cent, across the day and were headed higher in post-bell trading.
Nutanix is far from alone in predicting pain from the pandemic: networker Arista today told investors it expects its FY 2020 results to slide back to FY 2018 revenue levels. The company posted earnings of $138.4m on revenue of $523m. ®