Nutanix Inc Q4 2024 Earnings Call Transcript

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

Question: George Wang - Barclays - Analyst : Oh, yeah, thanks for taking my question. Firstly, just curious if you have any update on the Broadcom trend, especially, last couple of quarters you guys top of that after the initial wave of will strong engagement and activity slowed just because of Broadcom walking back. Some of the initial initiatives is to be now more in favor also retain some of the primary customers. Just curious if it at that dynamic has changed.

Question: George Wang - Barclays - Analyst : Okay, great. Just if I can squeeze in quickly, it's nice to see one customer in financial services, as you guys mentioned, without changing the underlying hardware. Previously, one of the gaining factors has been upgrading the underlying hardware to wait for the hardware refresh. I guess, can you talk about better path going forward. Now it seems -- especially after GAAP partnership, maybe you're kind of removing some of the constraints related to the underlying hardware refresh. Maybe you can give a little bit more comment on that.

Question: George Wang - Barclays - Analyst : Okay, thank you. I'll go back to the queue. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2024 / 8:30PM, NTNX.OQ - Q4 2024 Nutanix Inc Earnings Call

Question: Jim Fish - Piper Sandler - Analyst : Hey, guys. Thanks for the questions here. Chief, I do want to ask around, essentially, you alluded to a little bit of GPT-in-a-Box here. I don't think we can be on a conference call anymore without talking about AI, but are you seeing any sort of trend of repatriation of workloads back to private

Question: Jim Fish - Piper Sandler - Analyst : Makes sense. And Rukmini, I'm sure you're anticipating this question already, but I guess how much -- as we think about that '25 guide, how much incremental contribution are you expecting either from a growth dollar perspective, however you want to put it, between the VMware opportunity, the Cisco and Dell partnerships versus the expansion within your existing install base that, if memory serves me right, should be accelerating a little bit in terms of the renewals up for grabs this year. And is there a way to think about where ARR actually exits this year? Thanks, guys.

Question: Meta Marshall - Morgan Stanley - Analyst : Great, thanks. I wanted to get a sense, maybe kind of circling back to the question that's been asked a couple of times, just in terms of Do you feel like you've figured out where Broadcom's line is, where the definition of your customer is? Are you refining where you think the most actionable opportunities are, or are you still in that discovery mode of figuring out what are the most actionable opportunities? And then, Rukmini, I know Jim just asked about it, but just kind of any of the timing of renewals or co-terming, just given that we've had some kind of early renewal dynamics and kind of co-terming issues over the past couple of years that we should just be mindful of as we go into fiscal '25. Thanks.

Question: Meta Marshall - Morgan Stanley - Analyst : Great. Thanks so much.

Question: Ruplu Bhattacharya - BofA Global Research - Analyst : Hi, thanks for taking the questions. It's Ruplu filling in for Wamsi today. I have one for Rajiv and one for Rukmini. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2024 / 8:30PM, NTNX.OQ - Q4 2024 Nutanix Inc Earnings Call Rajiv, is the demand environment materially different from 90 days ago? And can you talk about the pricing environment? Specifically, you know, I think you've said in the past that some customers may wait for their hardware to be depreciated. Is pricing a lever you can use to maybe drive faster share gains? For example, can a smaller customer be induced more to go with Nutanix? And as a management team, how do you trade off share gain versus margins? And I have a follow-up for Rukmini.

Question: Ruplu Bhattacharya - BofA Global Research - Analyst : Okay, thank you, Rajiv, for the detailed answer there. Rukmini, I wanted to ask you, your free cash flow guidance for fiscal '25 is very strong above the prior 2023 Investor Day guidance. How should we think about the cadence of that in the first half versus the second half of fiscal '25? And then when we look at the remaining metrics, for example, revenue is now at the lower end of what you had thought, what you had guided in the Analyst Day. Given that, is it reasonable for investors to expect that the outer year, say fiscal '27 expectations, should also be lower? Or could there be a material acceleration over the next two years, given the dynamics of renewables and available to renew, as well as new logos that you're winning? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2024 / 8:30PM, NTNX.OQ - Q4 2024 Nutanix Inc Earnings Call

Question: Ruplu Bhattacharya - BofA Global Research - Analyst : Okay, thank you for all the details and congrats on the results. Thank you.

Question: Jason Ader - William Blair & Company - Analyst : Yeah, thank you. One quick one is on the eight-figure deal that you announced last quarter. Did you recognize any revenue this quarter from that deal? And then what's the kind of schedule look like on rev. rec. for that particular transaction? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2024 / 8:30PM, NTNX.OQ - Q4 2024 Nutanix Inc Earnings Call

Question: Jason Ader - William Blair & Company - Analyst : Okay, thank you. And then, Rajiv, for you, I think a bunch of people have asked this question around the VMware displacement opportunity, but I wanted to kind of frame it like this, which is, do you think you have a little bit of misalignment from a go-to-market standpoint right now, just because you're moving up market over the last couple of years in terms of the types of customers that you're targeting. And yet, it seems like most of the low hanging fruit from VMware disruption is coming more in that kind of lower end of the market and kind of low end of because of the enterprise.

Question: Jason Ader - William Blair & Company - Analyst : Got you. But I thought the eight-figure one that you won last quarter was like a three-year sale or two-and-a-half-year sale cycle or something. That wasn't really related to the Broadcom.

Question: Jason Ader - William Blair & Company - Analyst : Great. Thank you.

Question: Victor Chiu - Raymond James - Analyst : Hi, guys. This is Victor Chiu in for Simon. I wanted to follow up on that last Regarding customer migrations, within VMware's footprint of the three-tier infrastructure customers that you described, can you help us think about what percentage of those would be able to fairly easily adapt their existing applications and platforms to AHP, and what percentage, for better or worse, are married to VMware because of their dependency on some of the more advanced virtualization functionalities?

Question: Victor Chiu - Raymond James - Analyst : Okay. That's very helpful. And then can you help us think about how the economics compare with Nutanix having an AHV, having kind of a hypervisor included in the platform, the economics, does that make the economic materially different, or is it just kind of a marginal difference in more of a capabilities kind of thing?

Question: Victor Chiu - Raymond James - Analyst : And is the transition for an existing VMware HCI customer to Nutanix much easier? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2024 / 8:30PM, NTNX.OQ - Q4 2024 Nutanix Inc Earnings Call

Question: Victor Chiu - Raymond James - Analyst : Great, that's very helpful. Thank you.