Nutanix, Inc. Posts Market-Beating Q2 Earnings But Outlook Badly Misses Expectations

Nutanix, Inc. (NASDAQ:NTNX ) late Thursday [Mar 2, 2017 | 4:04pm] posted market-beating fiscal second quarter earnings results, but its outlook badly missed expectations and its stock sold off sharply in aftermarket trading.

Written by StockNews.com

The San Jose-based cloud platform provider reported adjusted Q2 EPS of ($0.28), which was $0.07 better than the Wall Street consensus estimate of ($0.35).

Revenues surged 77.4% from last year to $182.2 million, also topping analysts’ view for $178.4 million.

Nutanix also noted that gross margin in the latest period was 59.8%, just shy of its 60% guidance. Meanwhile, billings jumped 59% to $227.4 million.

The real story of NTNX’s report was much weaker than expected earnings guidance, however. The company forecast Q3 EPS of ($0.45) to ($0.48), while analysts are looking for a smaller net loss of ($0.35). It sees Q3 revenues of $180 to $190 million, which could also miss the $188.48 million Wall Street expects.

Nutanix also expects its margins to erode in the current period, predicting gross margins between 57% and 58% for Q3.

The company attempted to paint a rosy picture of its results via press release:

“Our journey has taken us from an unknown upstart to a well-established enterprise IT brand approaching a $1 billion annualized billings run-rate in just five years of selling. We continue to evolve and refine our strategy, including product expansions, sales focus and alternate consumption models, as we seek to capture a growing share of the highly dynamic $100+ billion enterprise infrastructure market,” said Dheeraj Pandey, CEO, Nutanix.

Investors weren’t buying the positive messages from management, however. Nutanix shares plunged $4.79 (-15.39%) to $26.33 in after-hours trading Thursday. Year-to-date, NTNX had gained 17.55% prior to today’s report, versus a 6.63% rise in the benchmark S&P 500 index during the same period.

NTNX currently has a StockNews.com POWR Rating of NR (Not Rated), and is unranked among 9 stocks in the Technology – Storage category.