Nutanix, Inc.

Good day, and thank you for standing by, and welcome to Nutanix Q3 2024 Earnings Conference Call. At this time, our 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'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Rich Valera, VP of Investor Relations at Nutanix.

Good afternoon, and welcome to today's conference call to discuss third 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 third 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 risks 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 more detailed description of these and other risks and uncertainties, please refer to our SEC filings, including our most recent annual report on Form 10-K and our subsequent quarterly reports on Form 10-Q, 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 predictions of future events. Please note, unless otherwise specifically referenced, all financial measures we used 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 website and in our earnings press release. Nutanix will be participating in the Bank of America Global Technology Conference in San Francisco on June 4th. We hope to see some of you there. Finally, our fourth quarter fiscal 2024 quiet period will begin on Wednesday, July 17th. And with that, I'll turn the call over to Rajiv. Rajiv?

Thank you, Rich, and good afternoon, everyone. We delivered a solid third quarter with results that came in ahead of our guidance. We continue to see 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, or TCO. Taking a closer look at the third quarter, we were happy to have exceeded all our guided metrics. We delivered quarterly revenue of $525 million and grew our ARR 24% year over year to $1.82 billion. We also had another quarter of solid free cash flow generation. Overall, our third quarter financial performance reflected continued disciplined execution. Our largest wins in the quarter demonstrated the appeal of the Nutanix Cloud Platform to organizations that are looking to modernize and improve the efficiency of the data center footprints while managing through some of the disruption from recent industry M&A. Our largest new customer win of the quarter was an eight figure ACV deal with a North American based Fortune 50 financial services company that was looking to streamline and automate the deployment and management of their substantial fleet of databases. This customer purchased the Nutanix cloud platform with Nutanix database service to automate all of their internal database deployment and management needs, while also modernizing the three-tier footprint previously used for running their databases. This win was substantially larger than our typical land win and marked the culmination of an approximately two-year engagement. Another notable win in Q3 was a significant renewal and expansion with a North American-based Fortune 500 provider of consumer packaged goods. This customer, whose data center footprint has historically been split between Nutanix and a competitor, was looking to standardize their automation and self-service capabilities on a single class They decided to standardize on Nutanix cloud platform, including our AHV hypervisor and Nutanix cloud management to handle their self-service and automation needs. They also added Nutanix unified storage and Nutanix database service for their unstructured data management and database automation needs respectively. Going forward, This customer plans on swapping out the competitive software in their existing footprint and also utilizing Nutanix Cloud Platform for all of their expansion needs. We see these wins as a testament to our ability to both land significant deals and expand within the largest companies. And we are encouraged by the substantial increase in the number of customers and partners engaging with us. including some of the world's largest companies. However, these larger opportunities tend to have longer sales cycles, can involve aggressive competitive responses, and exhibit greater variability with respect to timing and outcome. Rookmini will provide more color on the impact of these dynamics. Last week, we held our annual .NEXT conference in Barcelona, Spain, where the excitement from the 4,000-plus attendees was tangible. At .NEXT, we made a number of announcements demonstrating continued progress and plans on enhancing the functionality of the Nutanix Cloud Platform and broadening our partnerships, especially with respect to support for modern applications, and enterprise AI. On the enterprise AI front, we announced GPT in a Box 2.0, which will deliver expanded GPU and large language model support, automated configuration and management of model inference endpoints for Gen AI applications, simplified model management, and an expanded partner program. This includes a new partnership with Hugging Face to provide access to the Hugging Face library of large language models for Nutanix customers, as well as an expanded partnership with NVIDIA that includes the planned integration of NVIDIA's inference microservices, or NIM, into our automated enterprise AI solution. More broadly, we continue to see a high level of interest and additional wins with GPT in a box in Q3, including a win with a large EMEA-based government agency that is looking to deploy GenAI with fraud detection as the initial use case. On the modern application front, we announced the Nutanix Kubernetes Platform, or NKP, to simplify management of container-based modern applications using Kubernetes on-premises and in any native public cloud service. We also took initial steps in extending our data services for Kubernetes, or NDK, to cloud-native containerized environments. This will simplify the development of resilient, data-intensive modern applications in public clouds. and allow customers to ultimately run them anywhere in keeping with our project beacon vision. Finally, we announced the broadening of our partnership with Dell. While Nutanix software already works well with Dell hardware, we announced two new elements of our longstanding partnership. First, Dell is going to sell a tightly integrated hyperconverged solution combining the Nutanix Start Platform software with Dell PowerEdge service. This will provide our customers with the choice of procuring Nutanix's platform directly from Dell. We expect that this solution will be available later this calendar year. Second, we will together deliver the Nutanix Start Platform powered by AHV hypervisor for compute and Dell PowerFlex for storage. This will allow customers to reuse some of their existing IP-based Dell three-tier storage hardware, protecting their investment and giving them choice. We are in the development stage for this offering at this time and expect it to be available in calendar 2025. Now I'd like to comment on the recently published results of our sixth annual Nutanix Enterprise Cloud Index, a survey of 1,500 IT decision makers around the world. The top three priorities identified by respondents were data security and ransomware protection, implementing the right hybrid IT operations, and implementing AI strategies. I see these results as playing to the strengths of the Nutanix Cloud Platform, which has built-in ransomware protection with our data lens capability, enables hybrid multi-cloud operating models, and has strong support for AI with our GPT-in-a-box solution. In closing, I'm pleased with our solid Q3 results, our ongoing innovation on our Cloud Platform, particularly with respect to its support for modern applications and generative AI, and on the progress we continue to make on partnerships. We remain focused on delighting our customers while driving sustainable, profitable growth. And with that, I'll hand it over to Rukmini Sivaram. Rukmini?