Nutanix (NASDAQ:NTNX) reported FQ1 earnings that topped analyst expectations, paving the way for a guidance raise.
Earnings per share (EPS) of $0.29 easily topped the analyst estimate of $0.18. Revenue for the quarter reached $511.1 million, marking an 18% year-over-year increase and beating the consensus estimate of $501.3 million.
Key financial highlights include subscription revenue of $479.5 million, up 19% YoY and adjusted gross margin at 85.9%, compared to 83.4% in the previous year.
“We delivered a solid first quarter financial performance against an uncertain macro backdrop reflecting the value our customers see in the Nutanix Cloud Platform and the strength of our subscription business model,” said Rajiv Ramaswami, President and CEO of Nutanix.
Billings amounted to $561.1 million, exceeding the estimate of $531.7 million, while annual contract value billings reached $287.2 million, a 24% YoY increase, surpassing the consensus of $266.6 million.
Looking ahead, Nutanix anticipates FQ2 revenue in the range of $545-555 million, against a consensus of $534.11 million. For the fiscal year 2024, the company projects revenue between $2.095 billion and $2.125 billion, in-line with the consensus of $2.1 billion.
Analysts at Bank of America raised the price target by 10% to $55 per share as they saw “many positives” in the quarter.
“We continue to believe that Nutanix can march towards a rule of 40+ business over time. Reiterate Buy on higher growth and profitability and improving FCF. “