Nutanix Stock Plunges 12% on Weak Outlook

Nutanix (NASDAQ:NTNX) reported third-quarter earnings that exceeded Wall Street expectations, yet its shares dropped by 12% in pre-market today due to weaker-than-expected guidance for the fourth quarter.

The company posted third-quarter earnings per share (EPS) of $0.28, beating the analyst estimate of $0.17. Revenue for the quarter was $524.6 million, surpassing the Street estimate of $515.96 million.

However, Nutanix's revenue forecast for the fourth quarter is between $530 million and $540 million, below the analyst consensus of $548.1 million. For the full fiscal year 2024, the company expects revenue to be in the range of $2.13 billion to $2.14 billion, slightly under the consensus estimate of $2.141 billion.

President and CEO Rajiv Ramaswami credited the strong third-quarter performance to disciplined execution and a robust business model. He pointed out the value of recent initiatives in modern applications and generative AI, along with expanded partnerships, as key enhancements to the Nutanix Cloud Platform's value proposition.

CFO Rukmini Sivaraman highlighted the company's balanced top and bottom-line performance, noting a 24% year-over-year increase in annual recurring revenue (ARR) and strong free cash flow generation so far this year.