Business Wire | Sep 1, 2021 04:02PM EDT

Nutanix Reports Fourth Quarter and Fiscal 2021 Financial Results

Sep. 01, 2021

SAN JOSE, Calif.--(BUSINESS WIRE)--Sep. 01, 2021--Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced financial results for its fourth quarter and fiscal year ended July 31, 2021.

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Q4 and Fiscal 2021 Earnings Infographic (Graphic: Business Wire)

"Our fourth quarter was a strong end to an excellent fiscal year, which was marked by consistent execution and solid progress across both financial and strategic objectives," said Rajiv Ramaswami, President and CEO of Nutanix. "We have entered our fiscal 2022 with good momentum and a solid plan for growth, executing on the model we laid out at Investor Day and delivering on our vision of making clouds invisible."

"We achieved records across a number of key metrics in the fourth quarter, including ACV billings and revenue, which grew 26 and 19 percent year over year, respectively," said Duston Williams, CFO of Nutanix. "In fiscal 2022, we expect our growing base of low-cost renewals will drive further improvements in top and bottom line performance."

Fourth Quarter Fiscal 2021 Financial Summary

Q4 FY'21 Q4 FY'20 Y/Y Change

Annual Contract Value (ACV)^1 $176.3 $139.9 26%Billings million million

Annual Recurring Revenue (ARR)^2 $878.7 $481.3 83% million million

Run-rate Annual Contract Value $1.54 billion $1.22 billion 26%(ACV)^3

Average Contract Term^4 3.4 years 3.8 years (0.4) year

Revenue^5 $390.7 $327.9 19% million million

GAAP Gross Margin 79.9% 79.6% 30 bps

Non-GAAP Gross Margin 82.9% 83.0% (10) bps

GAAP Operating Expenses $454.1 $432.3 5% million million

Non-GAAP Operating Expenses $372.5 $345.8 8% million million

Free Cash Flow $(42.2) $(13.8) $(28.4) million million million

Fiscal 2021 Financial Summary

FY'21 FY'20 Y/Y Change

Annual Contract Value (ACV)^1 $594.3 million $505.2 million 18%Billings

Annual Recurring Revenue (ARR)^2 $878.7 million $481.3 million 83%

Run-rate Annual Contract Value $1.54 billion $1.22 billion 26%(ACV)^3

Average Contract Term^4 3.4 years 3.8 years (0.4) year

Revenue^5 $1.39 billion $1.31 billion 7%

GAAP Gross Margin 79.1% 78.1% 100 bps

Non-GAAP Gross Margin 82.3% 81.3% 100 bps

GAAP Operating Expenses $1.76 billion $1.85 billion (5)%

Non-GAAP Operating Expenses $1.43 billion $1.52 billion (6)%

Free Cash Flow $(158.5) $(249.4) $90.9 million million million

Reconciliations between GAAP and non-GAAP financial measures and key performance measures are provided in the tables of this press release.

Recent Company Highlights

* Formed Strategic Partnership with Red Hat to Deliver Open Hybrid Multicloud Solutions: Red Hat and Nutanix announced a strategic partnership to enable a solution for building, scaling and managing cloud-native applications on premises and in hybrid clouds. The collaboration enables installation, interoperability and management of Red Hat OpenShift and Red Hat Enterprise Linux with Nutanix Cloud Platform, including Nutanix AOS and AHV. * Expanded Partnership with Hewlett Packard Enterprise (HPE) to Deliver New Database as a Service Offering Through HPE Greenlake: Nutanix and HPE announced an expanded partnership in which Nutanix's Era multi-database operations and management solution will be bundled with HPE ProLiant servers, as a service through HPE GreenLake, in addition to its core cloud platform which is already a part of the Greenlake solution. * Released its Inaugural ESG Report: The report is available in the ESG section of the Nutanix Investor Relations website or can be accessed directly here. * Elected Virginia Gambale Chair of the Board: Ms. Gambale has served on the Nutanix Board of Directors since June 2020 and on public company boards for more than 20 years across a variety of industries, including technology. * Announced Details for .NEXT 2021: The digital .NEXT user conference, Nutanix's signature customer experience, will be held September 20 through 23. Registration details can be found at www.nutanix.com/next.

First Quarter Fiscal 2022 Outlook



ACV Billings $172 - $177 million

Non-GAAP Gross Margin Approximately 81.5%

Non-GAAP Operating Expenses $365 - $370 million

Weighted Average Shares Outstanding Approximately 216 million

Supplementary materials to this press release, including our fourth quarter and fiscal year 2021 earnings presentation, can be found at https://ir.nutanix.com/company/financial.

Webcast and Conference Call Information

Nutanix executives will discuss the company's fourth quarter and fiscal year 2021 financial results on a conference call at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. To listen to the call via telephone, dial 1-833-227-5841 from within the United States or 1-647-689-4068 from outside the United States. The conference ID is 3574479. This call will be webcast live and available to all interested parties on our Investor Relations website at ir.nutanix.com. Shortly after the conclusion of the conference call, a replay of the audio webcast will be available on our Investor Relations website. A telephonic replay will be available for one week and can be accessed by calling 1-800-585-8367 or 1-416-621-4642, and entering the conference ID 3574479.

Definitions and Total Revenue Impact

1Annual Contract Value, or ACV, is defined as the total annualized value of a contract, excluding amounts related to professional services and hardware. The total annualized value for a contract is calculated by dividing the total value of the contract by the number of years in the term of such contract, using, where applicable, an assumed term of five years for contracts that do not have a specified term. ACV Billings, for any given period, is defined as the sum of the ACV for all contracts billed during the given period. ACV Billings is the sum of New ACV Billings and Renewals ACV Billings.

2Annual Recurring Revenue, or ARR, for any given period, is defined as the sum of ACV for all non life-of-device contracts in effect as of the end of a specific period. For the purposes of this calculation, we assume that the contract term begins on the date a contract is booked, unless the terms of such contract prevent us from fulfilling our obligations until a later period, and irrespective of the periods in which we would recognize revenue for such contract.

3Run-rate ACV, at the end of any period, is the sum of ACV for all contracts that are in effect as of the end of that period. For the purposes of this calculation, the Company assumes that the contract term begins on the date a contract is booked, irrespective of the periods in which the Company would recognize revenue for such contract.

4Average Contract Term represents the dollar-weighted term, calculated on a billings basis, across all subscription and life-of-device contracts, using an assumed term of five years for life-of-device licenses, executed in the period.

5Revenue was negatively impacted by a year-over-year decline in the average contract term associated with Nutanix's ongoing transition to a subscription-based business model.

Non-GAAP Financial Measures and Other Key Performance Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial and other key performance measures: billings, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss, non-GAAP net loss per share, free cash flow, subscription revenue, subscription billings, Annual Contract Value Billings (or ACV Billings), Annual Recurring Revenue (or ARR), and Run-rate Annual Contract Value (or Run-rate ACV). In computing these non-GAAP financial measures and key performance measures, we exclude certain items such as stock-based compensation and the related income tax impact, costs associated with our acquisitions (such as amortization of acquired intangible assets, income tax-related impact, and other acquisition-related costs), impairment of operating lease-related assets, the change in fair value of the derivative liability, the amortization of the debt discount and issuance costs, non-cash interest expense, other non-recurring transactions and the related tax impact, and the revenue and billings associated with pass-through hardware sales. Billings is a performance measure which we believe provides useful information to investors because it represents the amounts under binding purchase orders received by us during a given period that have been billed, and we calculate billings by adding the change in deferred revenue between the start and end of the period to total revenue recognized in the same period. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss, and non-GAAP net loss per share are financial measures which we believe provide useful information to investors because they provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures such as stock-based compensation expense that may not be indicative of our ongoing core business operating results. Free cash flow is a performance measure that we believe provides useful information to our management and investors about the amount of cash generated by the business after necessary capital expenditures, and we define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment. Subscription revenue and subscription billings are performance measures that we believe provide useful information to our management and investors as they allow us to better track the growth of the subscription-based portion of our business, which is a critical part of our business plan. ACV Billings and Run-rate ACV are performance measures that we believe provide useful information to our management and investors as they allow us to better track the topline growth of our business during our transition to a subscription-based business model because they take into account variability in term lengths. ARR is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the topline growth of our subscription business because it takes into account variability in term lengths. We use these non-GAAP financial and key performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. However, these non-GAAP financial and key performance measures have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Billings, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss, non-GAAP net loss per share, and free cash flow are not substitutes for total revenue, gross margin, operating expenses, net loss, net loss per share, or net cash provided by (used in) operating activities, respectively; subscription revenue is not a substitute for total revenue; and subscription billings is not a substitute for subscription revenue. There is no GAAP measure that is comparable to ACV Billings, ARR, or Run-rate ACV, so we have not reconciled the ACV Billings, ARR, or Run-rate ACV numbers included in this press release to any GAAP measure. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures and key performance measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures and key performance measures as tools for comparison. We urge you to review the reconciliation of our non-GAAP financial measures and key performance measures to the most directly comparable GAAP financial measures included below in the tables captioned "Reconciliation of Revenue to Billings," "Disaggregation of Revenue and Billings," "Reconciliation of Subscription and Professional Services Revenue to Subscription and Professional Services Billings," "Reconciliation of GAAP to Non-GAAP Profit Measures," and "Reconciliation of GAAP Net Cash Provided By (Used In) Operating Activities to Non-GAAP Free Cash Flow," and not to rely on any single financial measure to evaluate our business.

Forward-Looking Statements

This press release contains express and implied forward-looking statements, including, but not limited to, statements regarding: our business plans, strategies, initiatives, vision, objectives, and outlook, including our growth plan and vision of making clouds invisible, as well as our ability to execute thereon successfully and in a timely manner and the benefits and impact thereof on our business, operations, and financial results, including our expectation that in our fiscal year ending July 31, 2022 our growing base of low-cost renewals will drive further improvements in top and bottom line performance; our plans for, and the timing of, any current and future business model transitions, including our ongoing transition to a subscription-based business model, our ability to manage, complete or realize the benefits of such transitions successfully and in a timely manner, and the short-term and long-term impacts of such transitions on our business, operations and financial results; the competitive market, including our competitive position and ability to compete effectively, the competitive advantages of our products, our projections about our market share and opportunity, and the effects of increased competition in our market; our ability to attract new end customers and retain and grow sales from our existing end customers; our customer needs and our response to those needs; our ability to form new, and maintain and strengthen existing, strategic alliances and partnerships, including our relationships with our channel partners and original equipment manufacturers, and the impact of any changes to such relationships on our business, operations and financial results; the benefits and capabilities of our platform, solutions, products, services and technology, including the interoperability and availability of our solutions with and on third-party platforms; our plans and expectations regarding new solutions, products, services, product features and technology, including those that are still under development or in process; our plans regarding, and the timing and success of, our customer, partner, industry, analyst, investor and employee events and the impact thereof on our business, operations, and financial results; the timing and potential impact of the COVID-19 pandemic on the global market environment and the IT industry, as well as on our business, operations and financial results, including the changes we have made or anticipate making in response to the COVID-19 pandemic, our ability to manage our business during the pandemic, and the position we anticipate being in following the pandemic; our decision to use new or different metrics, or to make adjustments to the metrics we use, to supplement our financial reporting, and the impact thereof; and our guidance on estimated ACV Billings, non-GAAP gross margin, non-GAAP operating expenses, and weighted average shares outstanding for any future fiscal periods.

These forward-looking statements are not historical facts and instead are based on our current expectations, estimates, opinions, and beliefs. Consequently, you should not rely on these forward-looking statements. The accuracy of these forward-looking statements depends upon future events and involves risks, uncertainties, and other factors, including factors that may be beyond our control, that may cause these statements to be inaccurate and cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by such statements, including, among others: failure to successfully implement or realize the full benefits of, or unexpected difficulties or delays in successfully implementing or realizing the full benefits of, our business plans, strategies, initiatives, vision, and objectives; our ability to achieve, sustain and/or manage future growth effectively; delays or unexpected accelerations in our current and future business model transitions; the rapid evolution of the markets in which we compete, including the introduction, or acceleration of adoption of, competing solutions, including public cloud infrastructure; failure to timely and successfully meet our customer needs; delays in or lack of customer or market acceptance of our new solutions, products, services, product features or technology; the timing, breadth, and impact of the COVID-19 pandemic on our business, operations, and financial results, as well as the impact on our customers, partners, and end markets; factors that could result in the significant fluctuation of our future quarterly operating results, including, among other things, anticipated changes to our revenue and product mix, including changes as a result of our transition to a subscription-based business model, which will slow revenue growth during such transition and make forecasting future performance more difficult, the timing and magnitude of orders, shipments and acceptance of our solutions in any given quarter, our ability to attract new and retain existing end-customers, changes in the pricing and availability of certain components of our solutions, and fluctuations in demand and competitive pricing pressures for our solutions; and other risks detailed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2020, filed with the U.S. Securities and Exchange Commission, or the SEC, on September 23, 2020, and our Quarterly Reports on Form 10-Q for the fiscal quarters ended January 31, 2021 and April 30, 2021, filed with the SEC on March 4, 2021 and June 3, 2021, respectively. Additional information will also be set forth in our Annual Report on Form 10-K for the fiscal year ended July 31, 2021 which should be read in conjunction with this press release and the financial results included herein. Our SEC filings are available on the Investor Relations section of our website at ir.nutanix.com and on the SEC's website at www.sec.gov. These forward-looking statements speak only as of the date of this press release and, except as required by law, we assume no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any of these forward-looking statements to reflect actual results or subsequent events or circumstances.

About Nutanix

Nutanix is a global leader in cloud software and a pioneer in hyperconverged infrastructure solutions, making clouds invisible, freeing customers to focus on their business outcomes. Organizations around the world use Nutanix software to leverage a single platform to manage any app at any location for their hybrid multicloud environments. Learn more at www.nutanix.com or follow us on social media @nutanix.

(c) 2021 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or trademarks of Nutanix, Inc. in the United States and other countries. Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release contains links to external websites that are not part of Nutanix.com. Nutanix does not control these sites and disclaims all responsibility for the content or accuracy of any external site. Our decision to link to an external site should not be considered an endorsement of any content on such a site.

NUTANIX, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

As of

July 31, July 31, 2020 2021

(in thousands)

Assets

Current assets:

Cash and cash equivalents $ 318,737 $ 285,723

Short-term investments 401,041 928,006

Accounts receivable, net 242,516 180,781

Deferred commissions-current 68,694 110,935

Prepaid expenses and other current assets 63,032 56,816

Total current assets 1,094,020 1,562,261

Property and equipment, net 143,172 131,621

Operating lease right-of-use assets 127,326 105,903

Deferred commissions-non-current 146,834 232,485

Intangible assets, net 49,392 32,012

Goodwill 185,260 185,260

Other assets-non-current 22,543 27,954

Total assets $ 1,768,547 $ 2,277,496

Liabilities and Stockholders' Deficit

Current liabilities:

Accounts payable $ 54,029 $ 47,056

Accrued compensation and benefits 109,109 162,337

Accrued expenses and other current 25,924 39,404 liabilities

Deferred revenue-current 534,572 636,421

Operating lease liabilities-current 36,569 42,670

Total current liabilities 760,203 927,888

Deferred revenue-non-current 648,869 676,502

Operating lease liabilities-non-current 116,794 86,599

Convertible senior notes, net 490,222 1,055,694

Derivative liability - 500,175

Other liabilities-non-current 27,436 42,679

Total liabilities 2,043,524 3,289,537

Stockholders' deficit:

Common stock 5 5

Additional paid-in capital 2,245,180 2,615,317

Accumulated other comprehensive income 2,030 (8 )

Accumulated deficit (2,522,192 ) (3,627,355 )

Total stockholders' deficit (274,977 ) (1,012,041 )

Total liabilities and stockholders' deficit $ 1,768,547 $ 2,277,496

NUTANIX, INC.CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended Fiscal Year Ended July 31, July 31,

2020 2021 2020 2021

(in thousands, except per share data)

Revenue:

Product $ 179,075 $ 202,946 $ 765,822 $ 705,804

Support,entitlements and 148,799 187,774 541,860 688,560 other services

Total revenue 327,874 390,720 1,307,682 1,394,364

Cost of revenue:

Product ^(1)(2) 13,413 15,793 71,312 55,287

Support,entitlements and 53,558 62,726 215,377 236,619 other services ^(1)

Total cost of 66,971 78,519 286,689 291,906 revenue

Gross profit 260,903 312,201 1,020,993 1,102,458

Operating expenses:

Sales and 264,453 270,789 1,160,389 1,052,508 marketing ^(1)(2)

Research and 135,338 140,658 553,978 556,950 development ^(1)

General andadministrative ^ 32,464 42,642 135,547 153,782 (1)

Total operating 432,255 454,089 1,849,914 1,763,240 expenses

Loss from (171,352 ) (141,888 ) (828,921 ) (660,782 )operations

Other expense, net (9,757 ) (211,610 ) (26,300 ) (354,991 )

Loss beforeprovision for (181,109 ) (353,498 ) (855,221 ) (1,015,773 )income taxes

Provision for 4,239 4,684 17,662 18,487 income taxes

Net loss $ (185,348 ) $ (358,182 ) $ (872,883 ) $ (1,034,260 )

Net loss per shareattributable toClass A and Class $ (0.93 ) $ (1.68 ) $ (4.48 ) $ (5.01 )B commonstockholders-basicand diluted

Weighted averageshares used incomputing net lossper shareattributable to 200,150 212,612 194,719 206,475 Class A and ClassB commonstockholders-basicand diluted

_________________________________________(1)

Includes the following stock-based compensation expense:

_________________________________________(1) Includes the following stock-based compensation expense:

Three Months Ended July 31,

Fiscal Year Ended July 31,

2020

2021

2020

2021

(in thousands)

Product cost of revenue

$

1,397

$

1,569

$

5,334

$

6,023

Support, entitlements and other services cost of revenue

6,164

6,598

22,014

24,460

Sales and marketing

33,878

29,814

126,015

122,815

Research and development

39,768

36,109

153,252

150,856

General and administrative

11,654

15,517

45,383

54,391

Total stock-based compensation expense

$

92,861

$

89,607

$

351,998

$

358,545

Three Months Ended Fiscal Year Ended July 31, July 31,

2020 2021 2020 2021

(in thousands)

Product cost of revenue $ 1,397 $ 1,569 $ 5,334 $ 6,023

Support, entitlements and other 6,164 6,598 22,014 24,460 services cost of revenue

Sales and marketing 33,878 29,814 126,015 122,815

Research and development 39,768 36,109 153,252 150,856

General and administrative 11,654 15,517 45,383 54,391

Total stock-based compensation $ 92,861 $ 89,607 $ 351,998 $ 358,545 expense

(2)

Includes the following amortization of intangible assets:

(2) Includes the following amortization of intangible assets:

Three Months Ended July 31,

Fiscal Year Ended July 31,

2020

2021

2020

2021

(in thousands)

Product cost of revenue

$

3,695

$

3,694

$

14,777

$

14,776

Sales and marketing

650

651

2,603

2,604

Total amortization of intangible assets

$

4,345

$

4,345

$

17,380

$

17,380

Three Months Ended Fiscal Year Ended July 31, July 31,

2020 2021 2020 2021

(in thousands)

Product cost of revenue $ 3,695 $ 3,694 $ 14,777 $ 14,776

Sales and marketing 650 651 2,603 2,604

Total amortization of intangible $ 4,345 $ 4,345 $ 17,380 $ 17,380 assets

NUTANIX, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Fiscal Year Ended July 31,

2020 2021

(in thousands)

Cash flows from operating activities:

Net loss $ (872,883 ) $ (1,034,260 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 93,773 94,373

Stock-based compensation 351,998 358,545

Change in fair value of derivative liability - 269,265

Amortization of debt discount and issuance 31,313 63,859 costs

Operating lease cost, net of accretion 30,374 34,757

Impairment of lease-related assets 3,002 1,420

Non-cash interest expense - 16,074

Other 324 6,380

Changes in operating assets and liabilities:

Accounts receivable, net 4,334 64,483

Deferred commissions (61,816 ) (127,891 )

Prepaid expenses and other assets 10,089 4,057

Accounts payable (16,574 ) (5,762 )

Accrued compensation and benefits 18,765 50,916

Accrued expenses and other liabilities 3,400 14,824

Operating leases, net (28,394 ) (37,582 )

Deferred revenue 272,410 126,732

Net cash used in operating activities (159,885 ) (99,810 )

Cash flows from investing activities:

Maturities of investments 645,828 784,176

Purchases of investments (607,194 ) (1,392,737 )

Sales of investments 75,413 70,055

Purchases of property and equipment (89,488 ) (58,647 )

Net cash provided by (used in) investing 24,559 (597,153 )activities

Cash flows from financing activities:

Proceeds from sales of shares through employee 57,797 65,766 equity incentive plans

Proceeds from the issuance of convertible - 723,617 notes, net of issuance costs

Repurchases of common stock - (125,079 )

Payment of finance lease obligations - (459 )

Net cash provided by financing activities 57,797 663,845

Net decrease in cash, cash equivalents and $ (77,529 ) $ (33,118 )restricted cash

Cash, cash equivalents and restricted 399,520 321,991 cash-beginning of period

Cash, cash equivalents and restricted cash-end $ 321,991 $ 288,873 of period

Restricted cash ^(1) 3,254 3,150

Cash and cash equivalents-end of period $ 318,737 $ 285,723

Supplemental disclosures of cash flow information:

Cash paid for income taxes $ 16,625 $ 16,639

Supplemental disclosures of non-cash investing and financing information:

Purchases of property and equipment included inaccounts payable and accrued and other $ 4,630 $ 12,832 liabilities

Finance lease liabilities arising from $ - $ 8,299 obtaining right-of-use assets

_________________________________________

(1)

Included within other assets-non-current in the consolidated balance sheets.

_________________________________________

(1) Included within other assets-non-current in the consolidated balance sheets.

Reconciliation of Revenue to Billings(Unaudited)

Three Months Ended Fiscal Year Ended July 31, July 31,

2020 2021 2020 2021

(in thousands)

Total revenue $ 327,874 $ 390,720 $ 1,307,682 $ 1,394,364

Change in deferred 60,636 38,768 272,410 126,732 revenue

Total billings $ 388,510 $ 429,488 $ 1,580,092 $ 1,521,096

Disaggregation of Revenue and Billings

(Unaudited)

Three Months Ended July 31,

Fiscal Year Ended July 31,

2020

2021

2020

2021

(in thousands)

Disaggregation of revenue:

Subscription revenue

$

284,777

$

352,178

$

1,030,180

$

1,243,621

Non-portable software revenue

29,539

12,945

208,158

71,390

Hardware revenue

1,403

3,234

23,455

6,259

Professional services revenue

12,155

22,363

45,889

73,094

Total revenue

$

327,874

$

390,720

$

1,307,682

$

1,394,364

Disaggregation of billings:

Subscription billings

$

340,633

$

390,290

$

1,276,413

$

1,354,155

Non-portable software billings

29,539

12,945

208,158

71,390

Hardware billings

1,403

3,234

23,455

6,259

Professional services billings

16,935

23,019

72,066

89,292

Total billings

$

388,510

$

429,488

$

1,580,092

$

1,521,096

Subscription - Subscription revenue includes any performance obligation which has a defined term, and is generated from the sales of software entitlement and support subscriptions, subscription software licenses and cloud-based Software as a Service, or SaaS offerings.

* Ratable - We recognize revenue from software entitlement and support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlement and support subscriptions. * Upfront - Revenue from our subscription software licenses is generally recognized upfront upon transfer of control to the customer, which happens when we make the software available to the customer.

Non-portable software - Non-portable software revenue includes sales of our enterprise cloud platform when delivered on a configured-to-order appliance by us or one of our OEM partners. The software licenses associated with these sales are typically non-portable and have a term equal to the life of the appliance on which the software is delivered. Revenue from our non-portable software products is generally recognized upon transfer of control to the customer.

Hardware - In transactions where we deliver the hardware appliance, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis. We consider the amount allocated to hardware revenue to be equivalent to the cost of the hardware procured. Hardware revenue is generally recognized upon transfer of control to the customer.

Professional services - We also sell professional services with our products. We recognize revenue related to professional services as they are performed.

Disaggregation of Revenue and Billings

(Unaudited)

Three Months Ended Fiscal Year Ended July 31, July 31,

2020 2021 2020 2021

(in thousands)

Disaggregation of revenue:

Subscription revenue $ 284,777 $ 352,178 $ 1,030,180 $ 1,243,621

Non-portable software 29,539 12,945 208,158 71,390 revenue

Hardware revenue 1,403 3,234 23,455 6,259

Professional services 12,155 22,363 45,889 73,094 revenue

Total revenue $ 327,874 $ 390,720 $ 1,307,682 $ 1,394,364

Disaggregation of billings:

Subscription billings $ 340,633 $ 390,290 $ 1,276,413 $ 1,354,155

Non-portable software 29,539 12,945 208,158 71,390 billings

Hardware billings 1,403 3,234 23,455 6,259

Professional services 16,935 23,019 72,066 89,292 billings

Total billings $ 388,510 $ 429,488 $ 1,580,092 $ 1,521,096

Subscription - Subscription revenue includes any performance obligation which has a defined term, and is generated from the sales of software entitlement and support subscriptions, subscription software licenses and cloud-based Software as a Service, or SaaS offerings.

* Ratable - We recognize revenue from software entitlement and support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlement and support subscriptions. * Upfront - Revenue from our subscription software licenses is generally recognized upfront upon transfer of control to the customer, which happens when we make the software available to the customer.

Non-portable software - Non-portable software revenue includes sales of our enterprise cloud platform when delivered on a configured-to-order appliance by us or one of our OEM partners. The software licenses associated with these sales are typically non-portable and have a term equal to the life of the appliance on which the software is delivered. Revenue from our non-portable software products is generally recognized upon transfer of control to the customer.

Hardware - In transactions where we deliver the hardware appliance, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis. We consider the amount allocated to hardware revenue to be equivalent to the cost of the hardware procured. Hardware revenue is generally recognized upon transfer of control to the customer.

Professional services - We also sell professional services with our products. We recognize revenue related to professional services as they are performed.

Annual Contract Value Billings, Annual Recurring Revenue and Run-rate AnnualContract Value

(Unaudited)

Three Months Ended Fiscal Year Ended July 31, July 31,

2020 2021 2020 2021

(in thousands)

Annual ContractValue Billings $ 139,942 $ 176,251 $ 505,179 $ 594,292 (ACV Billings)

Annual Recurring $ 481,250 $ 878,733 $ 481,250 $ 878,733 Revenue (ARR)

Run-rate AnnualContract Value $ 1,219,965 $ 1,535,360 $ 1,219,965 $ 1,535,360 (Run-rate ACV)

Reconciliation of Subscription and Professional Services Revenue to Subscription and Professional

Services Billings

(Unaudited)

Three Months Ended July 31,

Fiscal Year Ended July 31,

2020

2021

2020

2021

(in thousands)

Subscription revenue

$

284,777

$

352,178

$

1,030,180

$

1,243,621

Change in subscription deferred revenue

55,856

38,112

246,233

110,534

Subscription billings

$

340,633

$

390,290

$

1,276,413

$

1,354,155

Professional services revenue

$

12,155

$

22,363

$

45,889

$

73,094

Change in professional services deferred revenue

4,780

656

26,177

16,198

Professional services billings

$

16,935

$

23,019

$

72,066

$

89,292

Reconciliation of Subscription and Professional Services Revenue toSubscription and Professional

Services Billings

(Unaudited)

Three Months Ended Fiscal Year Ended July 31, July 31,

2020 2021 2020 2021

(in thousands)

Subscription revenue $ 284,777 $ 352,178 $ 1,030,180 $ 1,243,621

Change insubscription 55,856 38,112 246,233 110,534 deferred revenue

Subscription $ 340,633 $ 390,290 $ 1,276,413 $ 1,354,155 billings



Professional $ 12,155 $ 22,363 $ 45,889 $ 73,094 services revenue

Change inprofessional 4,780 656 26,177 16,198 services deferredrevenue

Professional $ 16,935 $ 23,019 $ 72,066 $ 89,292 services billings

Reconciliation of GAAP to Non-GAAP Profit Measures(Unaudited)

GAAP Non-GAAP Adjustments Non-GAAP

Three Three Months Ended (1) (2) (3) (4) (5) (6) (7) Months July 31, Ended 2021 July 31, 2021

(in thousands, except percentages and per share data)

Gross profit $ 312,201 $ 8,167 $ 3,694 $ (274 ) $ - $ - $ - $ - $ 323,788

Gross margin 79.9 % 2.1 % 1.0 % (0.1 ) - - - - 82.9 % %

Operating expenses:

Sales and marketing 270,789 (29,814 ) (651 ) - - - - - 240,324

Research and development 140,658 (36,109 ) - 1,128 - - - - 105,677

General and 42,642 (15,517 ) - - (622 ) - - - 26,503 administrative

Total operating expenses 454,089 (81,440 ) (651 ) 1,128 (622 ) - - - 372,504

Loss from operations (141,888 ) 89,607 4,345 (1,402 ) 622 - - - (48,716 )

Net loss $ (358,182 ) $ 89,607 $ 4,345 $ (1,402 ) $ 622 $ 187,912 $ 22,424 $ (756 ) $ (55,430 )

Weighted sharesoutstanding, 212,612 212,612 basic and diluted

Net loss per share, basicand $ (1.68 ) $ 0.42 $ 0.02 $ (0.01 ) $ - $ 0.88 $ 0.11 $ - $ (0.26 )diluted

_________________________________________

(1)

Stock-based compensation expense

(2)

Amortization of intangible assets

(3)

Recovery of lease-related asset impairment charges

(4)

Other

(5)

Change in fair value of derivative liability

(6)

Amortization of debt discount and issuance costs and non-cash interest expense

(7)

Income tax effect primarily related to stock-based compensation expense

_________________________________________

(1) Stock-based compensation expense

(2) Amortization of intangible assets

(3) Recovery of lease-related asset impairment charges

(4) Other

(5) Change in fair value of derivative liability

(6) Amortization of debt discount and issuance costs and non-cash interest expense

(7) Income tax effect primarily related to stock-based compensation expense

GAAP

Non-GAAP Adjustments

Non-GAAP

Fiscal Year Ended July 31, 2021

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Fiscal Year Ended July 31, 2021

(in thousands, except percentages and per share data)

Gross profit

$

1,102,458

$

30,483

$

14,776

$

13

$

-

$

-

$

-

$

-

$

1,147,730

Gross margin

79.1

%

2.2

%

1.0

%

-

-

-

-

-

82.3

%

Operating expenses:

Sales and marketing

1,052,508

(122,815

)

(2,604

)

-

-

-

-

-

927,089

Research and development

556,950

(150,856

)

-

(1,407

)

-

-

-

-

404,687

General and administrative

153,782

(54,391

)

-

-

(2,407

)

-

-

-

96,984

Total operating expenses

1,763,240

(328,062

)

(2,604

)

(1,407

)

(2,407

)

-

-

-

1,428,760

Loss from operations

(660,782

)

358,545

17,380

1,420

2,407

-

-

-

(281,030

)

Net loss

$

(1,034,260

)

$

358,545

$

17,380

$

1,420

$

2,407

$

269,265

$

79,933

$

743

$

(304,567

)

Weighted shares outstanding, basic and diluted

206,475

206,475

Net loss per share, basic and diluted

$

(5.01

)

$

1.74

$

0.08

$

0.01

$

0.01

$

1.30

$

0.39

$

-

$

(1.48

)

GAAP Non-GAAP Adjustments Non-GAAP

Fiscal Year Fiscal Year Ended July (1) (2) (3) (4) (5) (6) (7) Ended July 31, 2021 31, 2021

(in thousands, except percentages and per share data)

Gross profit $ 1,102,458 $ 30,483 $ 14,776 $ 13 $ - $ - $ - $ - $ 1,147,730

Gross margin 79.1 % 2.2 % 1.0 % - - - - - 82.3 %

Operating expenses:

Sales and marketing 1,052,508 (122,815 ) (2,604 ) - - - - - 927,089

Research and development 556,950 (150,856 ) - (1,407 ) - - - - 404,687

General and 153,782 (54,391 ) - - (2,407 ) - - - 96,984 administrative

Total operating expenses 1,763,240 (328,062 ) (2,604 ) (1,407 ) (2,407 ) - - - 1,428,760

Loss from operations (660,782 ) 358,545 17,380 1,420 2,407 - - - (281,030 )

Net loss $ (1,034,260 ) $ 358,545 $ 17,380 $ 1,420 $ 2,407 $ 269,265 $ 79,933 $ 743 $ (304,567 )

Weighted sharesoutstanding, 206,475 206,475 basic and diluted

Net loss per share, basicand $ (5.01 ) $ 1.74 $ 0.08 $ 0.01 $ 0.01 $ 1.30 $ 0.39 $ - $ (1.48 )diluted

_________________________________________

(1)

Stock-based compensation expense

(2)

Amortization of intangible assets

(3)

Impairment of lease-related assets

(4)

Other

(5)

Change in fair value of derivative liability

(6)

Amortization of debt discount and issuance costs

(7)

Income tax effect primarily related to stock-based compensation expense

_________________________________________

(1) Stock-based compensation expense

(2) Amortization of intangible assets

(3) Impairment of lease-related assets

(4) Other

(5) Change in fair value of derivative liability

(6) Amortization of debt discount and issuance costs

(7) Income tax effect primarily related to stock-based compensation expense

GAAP Non-GAAP Adjustments Non-GAAP

Three Months Three Ended July (1) (2) (3) (4) (5) Months 31, 2020 Ended July 31, 2020

(in thousands, except percentages and per share data)

Gross profit $ 260,903 $ 7,561 $ 3,695 $ - $ - $ - $ 272,159

Gross margin 79.6 % 2.3 % 1.1 % - - - 83.0 %

Operating expenses:

Sales and marketing 264,453 (33,878 ) (650 ) - - - 229,925

Research and 135,338 (39,768 ) - - - - 95,570 development

General and 32,464 (11,654 ) - (520 ) - - 20,290 administrative

Total operating 432,255 (85,300 ) (650 ) (520 ) - - 345,785 expenses

Loss from operations (171,352 ) 92,861 4,345 520 - - (73,626 )

Net loss $ (185,348 ) $ 92,861 $ 4,345 $ 520 $ 8,023 $ 605 $ (78,994 )

Weighted sharesoutstanding, 200,150 200,150 basic and diluted

Net loss per share,basic and $ (0.93 ) $ 0.47 $ 0.02 $ - $ 0.04 $ 0.01 $ (0.39 )diluted

_________________________________________

(1)

Stock-based compensation expense

(2)

Amortization of intangible assets

(3)

Other

(4)

Amortization of debt discount and debt issuance costs

(5)

Income tax effect primarily related to stock-based compensation expense

_________________________________________

(1) Stock-based compensation expense

(2) Amortization of intangible assets

(3) Other

(4) Amortization of debt discount and debt issuance costs

(5) Income tax effect primarily related to stock-based compensation expense

GAAP

Non-GAAP Adjustments

Non-GAAP

Fiscal Year Ended July 31, 2020

(1)

(2)

(3)

(4)

(5)

(6)

Fiscal Year Ended July 31, 2020

(in thousands, except share and per share data)

Gross profit

$

1,020,993

$

27,348

$

14,777

$

537

$

-

$

-

$

-

$

1,063,655

Gross margin

78.1

%

2.1

%

1.1

%

-

-

-

-

81.3

%

Operating expenses:

Sales and marketing

1,160,389

(126,015

)

(2,603

)

-

-

-

-

1,031,771

Research and development

553,978

(153,252

)

-

(2,465

)

-

-

-

398,261

General and administrative

135,547

(45,383

)

-

-

(1,499

)

-

-

88,665

Total operating expenses

1,849,914

(324,650

)

(2,603

)

(2,465

)

(1,499

)

-

-

1,518,697

Loss from operations

(828,921

)

351,998

17,380

3,002

1,499

-

-

(455,042

)

Net loss

$

(872,883

)

$

351,998

$

17,380

$

3,002

$

1,499

$

31,313

$

1,845

$

(465,846

)

Weighted shares outstanding, basic and diluted

194,719

194,719

Net loss per share, basic and diluted

$

(4.48

)

$

1.80

$

0.09

$

0.02

$

0.01

$

0.16

$

0.01

$

(2.39

)

GAAP Non-GAAP Adjustments Non-GAAP

Fiscal Year Fiscal Year Ended July (1) (2) (3) (4) (5) (6) Ended July 31, 2020 31, 2020

(in thousands, except share and per share data)

Gross profit $ 1,020,993 $ 27,348 $ 14,777 $ 537 $ - $ - $ - $ 1,063,655

Gross margin 78.1 % 2.1 % 1.1 % - - - - 81.3 %

Operating expenses:

Sales and marketing 1,160,389 (126,015 ) (2,603 ) - - - - 1,031,771

Research and development 553,978 (153,252 ) - (2,465 ) - - - 398,261

General and 135,547 (45,383 ) - - (1,499 ) - - 88,665 administrative

Total operating expenses 1,849,914 (324,650 ) (2,603 ) (2,465 ) (1,499 ) - - 1,518,697

Loss from operations (828,921 ) 351,998 17,380 3,002 1,499 - - (455,042 )

Net loss $ (872,883 ) $ 351,998 $ 17,380 $ 3,002 $ 1,499 $ 31,313 $ 1,845 $ (465,846 )

Weighted sharesoutstanding, 194,719 194,719 basic and diluted

Net loss per share, basicand $ (4.48 ) $ 1.80 $ 0.09 $ 0.02 $ 0.01 $ 0.16 $ 0.01 $ (2.39 )diluted

_________________________________________

(1)

Stock-based compensation expense

(2)

Amortization of intangible assets

(3)

Impairment of lease-related assets

(4)

Other

(5)

Amortization of debt discount and issuance costs

(6)

Income tax effect primarily related to stock-based compensation expense

_________________________________________

(1) Stock-based compensation expense

(2) Amortization of intangible assets

(3) Impairment of lease-related assets

(4) Other

(5) Amortization of debt discount and issuance costs

(6) Income tax effect primarily related to stock-based compensation expense

Reconciliation of GAAP Net Cash Provided By (Used In) Operating Activities toNon-GAAP Free Cash Flow(Unaudited)

Three Months Ended Fiscal Year Ended July 31, July 31,

2020 2021 2020 2021

(in thousands)

Net cash provided by(used in) operating $ 3,630 $ (24,630 ) $ (159,885 ) $ (99,810 )activities

Purchases of property (17,415 ) (17,536 ) (89,488 ) (58,647 )and equipment

Free cash flow $ (13,785 ) $ (42,166 ) $ (249,373 ) $ (158,457 )

View source version on businesswire.com: https://www.businesswire.com/news/home/20210901005856/en/

CONTACT: Investor Contact: Richard Valera ir@nutanix.com

CONTACT: Media Contact: Jennifer Massaro pr@nutanix.com