Nutanix Reports First Quarter Fiscal 2025 Financial Results

GlobeNewswire Inc.

November 26, 2024 9:01PM GMT

Delivers Outperformance Across All First Quarter Guided Metrics

Reports 18% YoY ARR Growth and Strong Free Cash Flow

SAN JOSE, Calif., Nov. 26, 2024 (GLOBE NEWSWIRE) -- Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced financial results for its first quarter ended October 31, 2024.

“During our first quarter we delivered outperformance across our guided metrics,” said Rajiv Ramaswami, President and CEO of Nutanix. “We also continued to bring innovations to the market supporting our vision of becoming the leading platform for running apps and managing data, anywhere, while strengthening our partner ecosystem.”

“Our first quarter results demonstrated a good balance of top and bottom line performance with 18% year-over-year ARR growth and strong free cash flow generation,” said Rukmini Sivaraman, CFO of Nutanix. “We remain focused on delivering sustainable, profitable growth.”

First Quarter Fiscal 2025 Financial Summary

 

Q1 FY’25

Q1 FY’24

Y/Y Change

Annual Recurring Revenue (ARR)

1

$1.97 billion

$1.66 billion

18%

Average Contract Duration

2

3.1 years

2.9 years

0.2 year

Revenue

$591.0 million

$511.1 million

16%

GAAP Gross Margin

86.0%

84.0%

200 bps

Non-GAAP Gross Margin

87.5%

85.9%

160 bps

GAAP Operating Expenses

$481.0 million

$434.8 million

11%

Non-GAAP Operating Expenses

$398.9 million

$359.8 million

11%

GAAP Operating Income (Loss)

$27.3 million

$(5.7) million

$33.0 million

Non-GAAP Operating Income

$118.2 million

$79.5 million

$38.7 million

GAAP Operating Margin

4.6%

(1.1)%

570 bps

Non-GAAP Operating Margin

20.0%

15.6%

440 bps

Net Cash Provided by Operating Activities

$161.8 million

$145.5 million

$16.3 million

Free Cash Flow

$151.9 million

$132.5 million

$19.4 million

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

Recent Company Highlights

  • Nutanix Expands Partnership with AWS: Nutanix announced an expanded strategic collaboration with Amazon Web Services, Inc. (AWS) that will offer access to AWS services for customers looking to migrate to NC2 on AWS. As part of the collaboration, customers will gain access to promotional credits from AWS to support customer migrations and proof-of-concept trials, as well as Nutanix licensing promotions.
  • Nutanix is Named a Leader in 2024 Gartner® Magic Quadrant™ for Distributed Hybrid Infrastructure: Nutanix announced its recognition as a Leader in the 2024 Gartner® Magic Quadrant™ for Distributed Hybrid Infrastructure. Nutanix believes this recognition is due to the company’s vision and investments in the integration of edge, private and public clouds, as well as having a platform that supports both cloud native and traditional applications.
  • Nutanix is Positioned Furthest in Vision Among All Vendors in 2024 Gartner® Magic Quadrant™ for File and Object Storage Platforms: Nutanix announced it is positioned furthest in Vision among all vendors in the 2024 Gartner® Magic Quadrant™ for File and Object Storage Platforms. Nutanix believes this recognition is due to the company’s strong vision for an enterprise storage platform that unifies unstructured data across edge, public and private clouds.
  • Nutanix Extends AI Platform to Public Cloud: Nutanix announced that it extended the company's AI infrastructure platform with a new cloud native offering, Nutanix Enterprise AI (NAI), that can be deployed on any Kubernetes platform, at the edge, in core data centers and on public cloud services like AWS EKS, Azure AKS, and Google GKE.

Second Quarter Fiscal 2025 Outlook

 

 

 

Revenue

$635 - $645 million

 

Non-GAAP Operating Margin

20% to 21%

 

Weighted Average Shares Outstanding (Diluted)

3

Approximately 289 million

 

 

 

 

Fiscal 2025 Outlook

 

 

 

Revenue

$2.435 - $2.465 billion

 

Non-GAAP Operating Margin

16% to 17%

 

Free Cash Flow

$560 - $610 million

 

 

 

 

Supplementary materials to this press release, including our first quarter fiscal 2025 earnings presentation, can be found at https://ir.nutanix.com/financial/quarterly-results.

Webcast and Conference Call Information

Nutanix executives will discuss the Company’s first quarter fiscal 2025 financial results on a conference call today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. Interested parties may access the conference call by registering at this link to receive dial in details and a unique PIN number. The conference call will also be webcast live on the Nutanix Investor Relations website at ir.nutanix.com. An archived replay of the webcast will be available on the Nutanix Investor Relations website at ir.nutanix.com shortly after the call.

Footnotes

1Annual Recurring Revenue, or ARR, for any given period, is defined as the sum of ACV for all subscription 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. Excludes all life-of-device contracts. ACV is defined as the total annualized value of a contract. 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. Excludes amounts related to professional services and hardware.

2Average Contract Duration represents the dollar-weighted term, calculated on a billings basis, across all subscription contracts, as well as our limited number of life-of-device contracts, using an assumed term of five years for life-of-device licenses, executed in the period.

3Weighted average share count used in computing diluted non-GAAP net income per share.

Non-GAAP Financial Measures and Other Key Performance Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, this press release includes the following non-GAAP financial and other key performance measures: non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, free cash flow, Annual Recurring Revenue (or ARR), and Average Contract Duration. In computing non-GAAP financial 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), restructuring charges, litigation settlement accruals and legal fees related to certain litigation matters, the amortization and conversion of the debt discount and issuance costs related to convertible senior notes, interest expense related to convertible senior notes, and other non-recurring transactions and the related tax impact. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, and non-GAAP operating margin 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 capital expenditures, and we define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment. 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. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, and free cash flow are not substitutes for gross margin, operating expenses, operating income (loss), operating margin, or net cash provided by (used in) operating activities, respectively. There is no GAAP measure that is comparable to ARR or Average Contract Duration, so we have not reconciled the ARR or Average Contract Duration data 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 GAAP to Non-GAAP Profit Measures” and “Reconciliation of GAAP Net Cash Provided By Operating Activities to Non-GAAP Free Cash Flow,” and not to rely on any single financial measure to evaluate our business. This press release also includes the following forward-looking non-GAAP financial measures as part of our second quarter fiscal 2025 outlook and/or our fiscal 2025 outlook: non-GAAP operating margin and free cash flow. We are unable to reconcile these forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures without unreasonable efforts, as we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact the GAAP financial measures for these periods but would not impact the non-GAAP financial measures.

Forward-Looking Statements

This press release contains express and implied forward-looking statements, including, but not limited to, statements regarding: our business momentum and prospects; our innovations supporting our vision of becoming the leading platform for running applications and managing data, anywhere; strengthening our partner ecosystem; our focus on delivering sustainable, profitable growth; our second quarter fiscal 2025 outlook; and our fiscal 2025 outlook.

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: the inherent uncertainty or assumptions and estimates underlying our projections and guidance, which are necessarily speculative in nature; any 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, objectives, momentum, prospects and outlook; our ability to achieve, sustain and/or manage future growth effectively; 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; macroeconomic or geopolitical uncertainty; our ability to attract, recruit, train, retain, and, where applicable, ramp to full productivity, qualified employees and key personnel; factors that could result in the significant fluctuation of our future quarterly operating results (including anticipated changes to our revenue and product mix, 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); our ability to form new or maintain and strengthen existing strategic alliances and partnerships, as well as our ability to manage any changes thereto; our ability to make share repurchases; and other risks detailed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 filed with the U.S. Securities and Exchange Commission, or the SEC, on September 19, 2024. Additional information will be set forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2024, 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, offering organizations a single platform for running applications and managing data, anywhere. With Nutanix, companies can reduce complexity and simplify operations, freeing them to focus on their business outcomes. Building on its legacy as the pioneer of hyperconverged infrastructure, Nutanix is trusted by companies worldwide to power hybrid multicloud environments consistently, simply, and cost-effectively. Learn more at www.nutanix.com or follow us on social media @nutanix.

© 2024 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or unregistered trademarks of Nutanix, Inc. (“Nutanix”) in the United States and other countries. Other brand names or marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release is for informational purposes only and nothing herein constitutes a warranty or other binding commitment by Nutanix.

Investor Contact:
Richard Valera
ir@nutanix.com

Media Contact:
Lia Bigano
pr@nutanix.com

 

NUTANIX, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)

 

 

 

As of

 

 

 

July 31,
2024 

 

October 31,
2024 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

655,270

 

 

$

716,604

 

Short-term investments

 

 

339,072

 

 

 

358,846

 

Accounts receivable, net

 

 

229,796

 

 

 

198,582

 

Deferred commissions—current

 

 

159,849

 

 

 

150,975

 

Prepaid expenses and other current assets

 

 

97,307

 

 

 

98,452

 

Total current assets

 

 

1,481,294

 

 

 

1,523,459

 

Property and equipment, net

 

 

136,180

 

 

 

132,455

 

Operating lease right-of-use assets

 

 

109,133

 

 

 

118,593

 

Deferred commissions—non-current

 

 

198,962

 

 

 

188,364

 

Intangible assets, net

 

 

5,153

 

 

 

4,298

 

Goodwill

 

 

185,235

 

 

 

185,235

 

Other assets—non-current

 

 

27,961

 

 

 

28,947

 

Total assets

 

$

2,143,918

 

 

$

2,181,351

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

45,066

 

 

$

44,698

 

Accrued compensation and benefits

 

 

195,602

 

 

 

164,670

 

Accrued expenses and other current liabilities

 

 

24,967

 

 

 

18,968

 

Deferred revenue—current

 

 

954,543

 

 

 

968,642

 

Operating lease liabilities—current

 

 

24,163

 

 

 

23,621

 

Total current liabilities

 

 

1,244,341

 

 

 

1,220,599

 

Deferred revenue—non-current

 

 

918,163

 

 

 

925,743

 

Operating lease liabilities—non-current

 

 

90,359

 

 

 

100,409

 

Convertible senior notes, net

 

 

570,073

 

 

 

570,458

 

Other liabilities—non-current

 

 

49,130

 

 

 

49,438

 

Total liabilities

 

 

2,872,066

 

 

 

2,866,647

 

Stockholders’ deficit:

 

 

 

 

 

 

Common stock

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

4,118,898

 

 

 

4,145,942

 

Accumulated other comprehensive loss

 

 

146

 

 

 

559

 

Accumulated deficit

 

 

(4,847,199

)

 

 

(4,831,804

)

Total stockholders’ deficit

 

 

(728,148

)

 

 

(685,296

)

Total liabilities and stockholders’ deficit

 

$

2,143,918

 

 

$

2,181,351

 

 

NUTANIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

 

 

 

Three Months Ended
October 31,

 

 

 

2023

 

 

2024

 

 

 

(in thousands, except per share data)

 

Revenue:

 

 

 

 

 

 

Product

 

$

246,922

 

 

$

301,919

 

Support, entitlements and other services

 

 

264,132

 

 

 

289,037

 

Total revenue

 

 

511,054

 

 

 

590,956

 

Cost of revenue:

 

 

 

 

 

 

Product

(1)(2)

 

 

10,234

 

 

 

8,370

 

Support, entitlements and other services

(1)

 

 

71,725

 

 

 

74,300

 

Total cost of revenue

 

 

81,959

 

 

 

82,670

 

Gross profit

 

 

429,095

 

 

 

508,286

 

Operating expenses:

 

 

 

 

 

 

Sales and marketing

(1)(2)

 

 

235,323

 

 

 

253,401

 

Research and development

(1)

 

 

151,975

 

 

 

173,959

 

General and administrative

(1)

 

 

47,503

 

 

 

53,676

 

Total operating expenses

 

 

434,801

 

 

 

481,036

 

(Loss) income from operations

 

 

(5,706

)

 

 

27,250

 

Other (expense) income, net

 

 

(5,275

)

 

 

9,573

 

(Loss) income before provision for income taxes

 

 

(10,981

)

 

 

36,823

 

Provision for income taxes

 

 

4,872

 

 

 

6,897

 

Net (loss) income

 

$

(15,853

)

 

$

29,926

 

Net (loss) income per share attributable to Class A common stockholders, basic

 

$

(0.07

)

 

$

0.11

 

Net (loss) income per share attributable to Class A common stockholders, diluted

 

$

(0.07

)

 

$

0.10

 

Weighted average shares used in computing net (loss) income per share attributable to Class A common stockholders, basic

 

 

241,490

 

 

 

266,556

 

Weighted average shares used in computing net (loss) income per share attributable to Class A common stockholders, diluted

 

 

241,490

 

 

 

288,829

 

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

 

 

 

 

 

 

Three Months Ended
October 31,

 

 

 

2023 

 

2024 

 

 

(in thousands)

 

Product cost of revenue

 

$

1,928

 

 

$

1,212

 

Support, entitlements and other services cost of revenue

 

 

7,116

 

 

 

6,820

 

Sales and marketing

 

 

21,471

 

 

 

20,648

 

Research and development

 

 

38,404

 

 

 

43,562

 

General and administrative

 

 

15,079

 

 

 

16,507

 

Total stock-based compensation expense

 

$

83,998

 

 

$

88,749

 

(2)  Includes the following amortization of intangible assets:

 

 

Three Months Ended
October 31,

 

 

 

2023 

 

2024 

 

 

(in thousands)

 

Product cost of revenue

 

$

1,111

 

 

$

767

 

Sales and marketing

 

 

37

 

 

 

88

 

Total amortization of intangible assets

 

$

1,148

 

 

$

855

 

 

NUTANIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

 

 

 

Three Months Ended
October 31,

 

 

 

2023

 

 

2024

 

 

 

(in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net (loss) income

 

$

(15,853

)

 

$

29,926

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

18,187

 

 

 

18,180

 

Stock-based compensation

 

 

83,998

 

 

 

88,749

 

Amortization of debt discount and issuance costs

 

 

11,055

 

 

 

386

 

Operating lease cost, net of accretion

 

 

7,872

 

 

 

6,919

 

Non-cash interest expense

 

 

5,017

 

 

 

 

Other

 

 

(4,044

)

 

 

(817

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

23,656

 

 

 

52,453

 

Deferred commissions

 

 

5,098

 

 

 

19,472

 

Prepaid expenses and other assets

 

 

60,696

 

 

 

(1,999

)

Accounts payable

 

 

3,953

 

 

 

(4,454

)

Accrued compensation and benefits

 

 

(7,421

)

 

 

(35,906

)

Accrued expenses and other liabilities

 

 

(89,029

)

 

 

(4,727

)

Operating leases, net

 

 

(7,791

)

 

 

(6,871

)

Deferred revenue

 

 

50,079

 

 

 

440

 

Net cash provided by operating activities

 

 

145,473

 

 

 

161,751

 

Cash flows from investing activities:

 

 

 

 

 

 

Maturities of investments

 

 

248,980

 

 

 

91,648

 

Purchases of investments

 

 

(278,178

)

 

 

(110,011

)

Purchases of property and equipment

 

 

(13,020

)

 

 

(9,831

)

Net cash used in investing activities

 

 

(42,218

)

 

 

(28,194

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from sales of shares through employee equity incentive plans

 

 

13,783

 

 

 

28,113

 

Taxes paid related to net share settlement of equity awards

 

 

 

 

 

(79,274

)

Repurchases of common stock

 

 

(17,513

)

 

 

(20,100

)

Payment of finance lease obligations

 

 

(637

)

 

 

(964

)

Net cash used in financing activities

 

 

(4,367

)

 

 

(72,225

)

Net increase in cash, cash equivalents and restricted cash

 

$

98,888

 

 

$

61,332

 

Cash, cash equivalents and restricted cash—beginning of period

 

 

515,771

 

 

 

655,662

 

Cash, cash equivalents and restricted cash—end of period

 

$

614,659

 

 

$

716,994

 

Restricted cash

(1)

 

 

2,197

 

 

 

390

 

Cash and cash equivalents—end of period

 

$

612,462

 

 

$

716,604

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid for income taxes

 

$

8,134

 

 

$

9,296

 

Supplemental disclosures of non-cash investing and financing information:

 

 

 

 

 

 

Purchases of property and equipment included in accounts payable and accrued and other liabilities

 

$

15,013

 

 

$

4,517

 

Unpaid taxes related to net share settlement of equity awards included in accrued expenses and other liabilities

 

$

 

 

$

16,788

 

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

 

Reconciliation of Revenue to Billings(Unaudited)

 

 

 

Three Months Ended
October 31,

 

 

 

2023 

 

2024 

 

 

(in thousands)

 

Total revenue

 

$

511,054

 

 

$

590,956

 

Change in deferred revenue

 

 

50,079

 

 

 

440

 

Total billings

 

$

561,133

 

 

$

591,396

 

 

Disaggregation of Revenue and Billings
(Unaudited)

 

 

 

Three Months Ended
October 31,

 

 

 

2023

 

 

2024

 

 

 

(in thousands)

 

Disaggregation of revenue:

 

 

 

 

 

 

Subscription revenue

 

$

479,478

 

 

$

560,696

 

Professional services revenue

 

 

22,835

 

 

 

27,285

 

Other non-subscription product revenue

 

 

8,741

 

 

 

2,975

 

Total revenue

 

$

511,054

 

 

$

590,956

 

Disaggregation of billings:

 

 

 

 

 

 

Subscription billings

 

$

528,914

 

 

$

564,292

 

Professional services billings

 

 

23,478

 

 

 

24,129

 

Other non-subscription product billings

 

 

8,741

 

 

 

2,975

 

Total billings

 

$

561,133

 

 

$

591,396

 

 

 

 

 

 

 

 

 

 

Subscription revenue — 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.

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

Other non-subscription product revenue — Other non-subscription product revenue includes $8.1 million and $1.9 million of non-portable software revenue for the three months ended October 31, 2023 and 2024, respectively, and $0.6 million and $1.1 million of hardware revenue for the three months ended October 31, 2023 and 2024, respectively.

  • Non-portable software revenue — Non-portable software revenue includes sales of our 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 can be used over 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 revenue — In the infrequent transactions where the hardware appliance is purchased directly from Nutanix, 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.

 

Annual Recurring Revenue(Unaudited)

 

 

 

Three Months Ended
October 31,

 

 

 

2023 

 

2024 

 

 

(in thousands)

 

Annual Recurring Revenue (ARR)

 

$

1,663,918

 

 

$

1,966,105

 

 

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

 

 

 

GAAP

 

 

Non-GAAP Adjustments

 

 

Non-GAAP

 

 

 

Three Months Ended October 31, 2024

 

 

(1) 

 

(2) 

 

(3) 

 

(4) 

 

(5) 

 

(6) 

 

Three Months Ended October 31, 2024

 

 

 

(in thousands, except percentages and per share data)

 

Gross profit

 

$

508,286

 

 

$

8,032

 

 

$

767

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

517,085

 

Gross margin

 

 

86.0

%

 

 

1.4

%

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

87.5

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

253,401

 

 

 

(20,648

)

 

 

(88

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

232,665

 

Research and development

 

 

173,959

 

 

 

(43,562

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

130,397

 

General and administrative

 

 

53,676

 

 

 

(16,507

)

 

 

 

 

 

(1,367

)

 

 

 

 

 

 

 

 

 

 

 

35,802

 

Total operating expenses

 

 

481,036

 

 

 

(80,717

)

 

 

(88

)

 

 

(1,367

)

 

 

 

 

 

 

 

 

 

 

 

398,864

 

Income from operations

 

 

27,250

 

 

 

88,749

 

 

 

855

 

 

 

1,367

 

 

 

 

 

 

 

 

 

 

 

 

118,221

 

Operating margin

 

 

4.6

%

 

 

15.1

%

 

 

0.1

%

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

20.0

%

Net income

 

$

29,926

 

 

$

88,749

 

 

$

855

 

 

$

1,367

 

 

$

(110

)

 

$

745

 

 

$

241

 

 

$

121,773

 

Weighted shares outstanding, basic

 

 

266,556

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

266,556

 

Weighted shares outstanding, diluted

(7)

 

 

288,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

288,829

 

Net income per share, basic

 

$

0.11

 

 

$

0.34

 

 

$

-

 

 

$

0.01

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

0.46

 

Net income per share, diluted

 

$

0.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.42

 

_____________
(1)  Stock-based compensation expense
(2)  Amortization of intangible assets
(3)  Legal fees
(4)  Other
(5)  Amortization of debt issuance costs related to convertible senior notes
(6)  Income tax effect primarily related to stock-based compensation expense
(7)  Includes 22,273 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

Non-GAAP Adjustments

 

 

Non-GAAP

 

 

 

Three Months Ended October 31, 2023

 

 

(1)

 

 

(2)

 

 

(3)

 

 

(4)

 

 

(5)

 

 

(6)

 

 

Three Months Ended October 31, 2023

 

 

 

(in thousands, except percentages and per share data)

 

Gross profit

 

$

429,095

 

 

$

9,044

 

 

$

1,111

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

439,250

 

Gross margin

 

 

84.0

%

 

 

1.7

%

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

85.9

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

235,323

 

 

 

(21,471

)

 

 

(37

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

213,815

 

Research and development

 

 

151,975

 

 

 

(38,404

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

113,571

 

General and administrative

 

 

47,503

 

 

 

(15,079

)

 

 

 

 

 

(46

)

 

 

 

 

 

 

 

 

 

 

 

32,378

 

Total operating expenses

 

 

434,801

 

 

 

(74,954

)

 

 

(37

)

 

 

(46

)

 

 

 

 

 

 

 

 

 

 

 

359,764

 

(Loss) income from operations

 

 

(5,706

)

 

 

83,998

 

 

 

1,148

 

 

 

46

 

 

 

 

 

 

 

 

 

 

 

 

79,486

 

Operating margin

 

 

(1.1

)%

 

 

16.5

%

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15.6

%

Net (loss) income

 

$

(15,853

)

 

$

83,998

 

 

$

1,148

 

 

$

46

 

 

$

16,347

 

 

$

(920

)

 

$

274

 

 

$

85,040

 

Weighted shares outstanding, basic

 

 

241,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

241,490

 

Weighted shares outstanding, diluted

(7)

 

 

241,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

292,861

 

Net (loss) income per share, basic

 

$

(0.07

)

 

$

0.35

 

 

$

-

 

 

$

-

 

 

$

0.07

 

 

$

-

 

 

$

-

 

 

$

0.35

 

Net (loss) income per share, diluted

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.29

 

 _____________
(1)  Stock-based compensation expense
(2)  Amortization of intangible assets
(3)  Legal fees
(4)  Amortization of debt discount and issuance costs and interest expense related to convertible senior notes
(5)  Other
(6)  Income tax effect primarily related to stock-based compensation expense
(7)  Includes 51,371 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans

 

Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow(Unaudited)

 

 

 

Three Months Ended
October 31,

 

 

 

2023

 

 

2024

 

 

 

(in thousands)

 

Net cash provided by operating activities

 

$

145,473

 

 

$

161,751

 

Purchases of property and equipment

 

 

(13,020

)

 

 

(9,831

)

Free cash flow

 

$

132,453

 

 

$

151,920