Nutanix Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Meta Marshall - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>Rajiv, Rukmini, thanks so much for being here with us today. Nutanix often gets pitched as a VMware beneficiary or beneficiary story. But there's a much stronger hybrid IT story beyond that. Can you just explain that value proposition and how it's grown as enterprises have cemented themselves to be hybrid?

Question: Meta Marshall - Morgan Stanley - Analyst : Great. You laid out there that this combined TAM is about $76 billion. Outside of core HCI, just which one of the multiple product lines do you expect to be the next biggest contributor to you?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect. Most of the time, investors tend to think that applications moving to the cloud is a one-way street. You've talked about seeing some repatriation of applications, particularly just given cloud optimization initiatives over the past couple of years. Can you outline why customers have done this and just why Nutanix is so important to be able to have that flexibility?

Question: Meta Marshall - Morgan Stanley - Analyst : Yes. Okay. Perfect. Stepping to the opportunity with VMware customers, you've obviously been competing against VMware for years. Where did you have success previously? And then just how do you see that opportunity developing over time?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Is there a type of customer that it makes the most sense for them to transition? Or just how is your view of what makes that ideal customer that you can take away from VMware change?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. You talked about seeing more success in these transitions in fiscal Q2 earnings last week. Just how much of that is we're now 1.5 years into this acquisition, people's contracts are coming up versus just better targeting, better channel incentives. Just how do you think about the increasing success you're seeing?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect. Rukmini, I want to bring you into the conversation. What are the pricing dynamics you're seeing in these large enterprise deals? Particularly Broadcom can respond aggressively sometimes. Just how are you thinking about how to appropriately price and get these deals?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. I mean you had talked about maybe getting a little bit more flexible or evaluating what potential incentives are. How do you balance what clearly has been an increasingly profitable company with the desire to take advantage of the opportunities you see?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect. Rajiv, maybe turning back to you for a second. Can you just provide more details on the GPT-in-the-box and the adoption patterns you're seeing or just reiterating a little bit of what that value proposition is? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 06, 2025 / 4:30PM, NTNX.OQ - Nutanix Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : All right. Perfect. Another area that you've expanded a lot over the past year is channel, forging deeper relationships with Cisco and Dell. Just how have they contributed thus far? And just how do you see them developing over the years?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Interesting. Rukmini, turning back to you. You've noted that you're seeing some moderately elongated sales cycles and continued scrutiny on spend, while simultaneously achieving very strong results in fiscal Q2. Could you just provide a little bit more color on deal structure and approval processes and just how they've evolved in the spending environment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 06, 2025 / 4:30PM, NTNX.OQ - Nutanix Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. You saw some improvement in the federal business in Q2 from Q1. But just how are you thinking about that federal business and what is assumed in the guide?

Question: Meta Marshall - Morgan Stanley - Analyst : Perfect. You've planned to increase some sales and marketing and R&D investments in the second half of the fiscal year. Just what metrics are you using to measure the ROI on these investments? And just the trajectory of how you're thinking of OpEx, particularly in light of all the opportunities that Rajiv is laying out?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Great. I have a bunch more questions, but are there any questions from the audience? All right. Perfect. I get to stick to my questions. All right. With the recent convertible note issuance and new revolving credit facility, you also generate a fair amount of cash as well. Just how are you thinking about capital allocation priorities between organic, M&A and potential share repurchases?

Question: Meta Marshall - Morgan Stanley - Analyst : All right. Perfect. Last question that we've been asking to a lot of companies at the conference. And Rajiv, you already noted an example or I heard you mention an example. But just how are you using AI internally within Nutanix or looking to use it over the next couple of years?

Question: Meta Marshall - Morgan Stanley - Analyst : All right. Perfect. Well, Rajiv, Rukmini, thanks so much for being here today and telling us more about Nutanix.