Nutanix, Inc.

Good day, and thank you for standing by. Welcome to the Nutanix Q1 2024 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. You will then hear an automated message advising your hand is raised. To answer your question, please press star 1 again. Please be advised, that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Rich Valera, VP of Investor Relations. Please go ahead.

Good afternoon, and welcome to today's conference call to discuss first quarter fiscal year 2024 financial results. Joining me today are Rajiv Ramaswamy, Nutanix's President and CEO, and Rukmini Sivaraman, Nutanix's CFO. After the market closed today, Nutanix issued a press release announcing first quarter fiscal year 2024 financial results. If you'd like to read the release, please visit the press releases section of our IR website. During today's call, management will make forward-looking statements, including financial guidance. These forward-looking statements involve risk and uncertainties, some of which are beyond our control, which could cause actual results to differ materially and adversely from those anticipated by these statements. For a more detailed description of these and other risks and uncertainties, please refer to our SEC filings, including our annual report on Form 10-K for the fiscal year ended July 31, 2023, as well as our earnings press release issued today. These forward-looking statements apply as of today, and we undertake no obligation to revise these statements after this call. As a result, you should not rely on them as representing our future views. Please note, Unless otherwise specifically referenced, all financial measures we use on today's call, except for revenue, are expressed on a non-GAAP basis and have been adjusted to exclude certain charges. We have provided, to the extent available, reconciliations of these non-GAAP financial measures to GAAP financial measures on our IR website and in our earnings press release. Nutanix will be participating in the Raymond James TMT and Consumer Conference in New York City on December 5th. and the Barclays Global Technology Conference in San Francisco on December 6th. We hope to see you at one of these events. Finally, our second quarter fiscal 2024 quiet period will begin on Wednesday, January 17th. And with that, I'll turn the call over to Rajiv. Rajiv?

Thank you, Rich, and good afternoon, everyone. We delivered a solid first quarter with results that came in ahead of our guidance. The uncertain macro backdrop that we saw in our first quarter was largely unchanged compared with the prior quarter. However, we saw steady demand for our solutions driven by businesses prioritizing their digital transformation and infrastructure modernization initiatives and looking to optimize their total cost of ownership. Taking a closer look at the first quarter, we were happy to have exceeded all our guided metrics. We delivered record quarterly revenue of $511 million, exceeding a $2 billion annualized run rate for the first time, and grew our ARR 30% year over year to $1.7 billion. We also had another quarter of strong free cash flow generation aided by good linearity. Overall, our first quarter financial performance was a strong start to our fiscal year. Our federal business is typically strong in our first quarter, and this one was no exception. We saw wins with several different agencies across all three of our expansion vectors, including additional capacity for existing workloads, capacity for net new workloads, and adoption of additional portfolio products. The wins also included expansion into the public cloud with NC2 on AWS, and our first win with a large existing customer for GPT in a box, our recently introduced turnkey solution for deploying generative AI. We view the breadth and diversity of our wins with this important customer as a testament to our ability to expand within our largest customers. Another notable win in the quarter was with a global 2000 bank in the Asia Pacific region. This customer, who signed a significant expansion agreement, selected Nutanix as their sole platform for their future modernization initiatives and plan build out of multiple new data centers. This was a departure from the historical dual vendor strategy. They chose our Nutanix cloud platform, including Nutanix cloud management to run their containerized business critical applications, leveraging its simplicity and built-in automation for infrastructure as a service. They also adopted Nutanix database service for managing and deploying their databases throughout their organization. We see this win as a great example of our ability to partner with the largest and most demanding companies in the world as they look to modernize and grow their businesses. Generating leverage from our partners remains a key focus. And towards this end, I'm excited with the early progress we've seen with our recently launched Cisco partnership. This past quarter, Our joint solution was made generally available to be sold by both sales forces. We also saw good customer interest and secured a few wins for this new offering, which were conversions of customers who had previously been planning to purchase Cisco's HyperFlex. While it's still early days in this partnership, I'm encouraged by what we've seen so far. Another positive development on the partner front in the first quarter was a significant expansion deal we signed with a North American managed service provider, or MSP. This partner was increasing its capacity to handle the expected growth of its Nutanix-related business. We see this win as reflecting the growing traction we're seeing with our MSP partners. On the product front, This quarter, we announced important enhancements to the Nutanix Cloud Platform to strengthen its capabilities against ransomware attacks on unstructured data. These new features enable organizations to detect a threat, defend from further damage, and begin a one-click recovery process, all within 20 minutes of exposure. They build on the strength of the Nutanix Cloud Platform to protect and secure customers' most sensitive data across clouds. These enhancements reflect our ongoing commitment to investing in our platform. In the past quarter, we continue to receive industry recognition for our Nutanix Cloud Platform, being recognized as a leader in the latest report from Forrester Research in this area. We view our position as one of only two companies named as a leader in this report, as a reflection of a strong competitive position in the market. Finally, it was a pleasure seeing many of you in person at our recent Invest Today. We were happy to be able to provide an update on a large and growing market opportunity, to discuss our long-term vision of enabling portable applications, and to provide targets calling for an ARR compound annual growth rate of approximately 20% through fiscal year 27 and generation of $700 to $900 million of free cash flow in fiscal year 27. We've received great feedback so far from our investor day and look forward to continuing to drive towards the vision and targets we share. And with that, I'll hand it over to Rukmini Sivaram. Rukmini?