Nutanix reported fiscal third-quarter earnings and revenue that topped consensus estimates. July quarter revenue guidance for Nutanix stock came in well below expectations, sending shares tumbling.
Reported after the close on Wednesday, Nutanix earnings for the quarter ended April 30 were 28 cents a share on an adjusted basis vs. 4 cents a year earlier. That topped estimates for an 17-cent adjusted profit.
The maker of cloud-computing network management software said revenue for NTNX stock rose 17% to $524.6 million, ahead of views for $516 million in sales.
For the current quarter ending in July, Nutanix predicted revenue in a range of $530 million to $540 million, well below estimates of $546 million.
Nutanix Stock: Large Deals A Factor
At RBC Capital, analyst Matthew Hedberg said in a report: "Management noted uncertainty around large deal timing and modest sales elongation."
Also, fiscal Q3 free cash flow came in at $78.3 million, below estimates of $85.5 million.
"The current guidance includes impact from the increasing variability that management has seen from larger deals in the pipeline, reflecting new and expansion bookings tracking below management expectations," said William Blair analyst Jason Ader in a report.
He added: "Full-year guidance assumes modest impact from the VMware displacement opportunity and developing OEM partnerships, both of which should have a more material impact in fiscal 2025."
On the stock market today, NTNX stock crashed 23.1% to close at 56.36.
NTNX Stock: Key Metric Comes In Strong
One metric important to Nutanix stock involves subscription contracts and recurring revenue reported as annual contract value billings.
In fiscal Q3, ACV billings rose 20% to $288.9 million vs. estimates of $271.5 million.
Further, Nutanix's software manages network, storage and server infrastructure in cloud-computing platforms. Nutanix competes against Broadcom's VMware unit, Hewlett Packard Enterprise and Dell Technologies.
Meanwhile, Nutanix stock has gained 51% in 2024. NTNX stock trades above a 5% buy zone, with an entry point of 66.98.
The stock holds a Relative Strength Rating of 97 out of a best-possible 99, according to IBD Stock Checkup.
Also, Nutanix has transitioned to a software subscription business model from selling hardware appliances.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
