Nutanix, Inc.

Thank you for standing by and welcome to Nutanix 4th Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded, and now I'd like to introduce your host for today's program, Rich Valera, Vice President of Investor Relations.

Good afternoon, and welcome to today's conference call to discuss Nutanix's fourth 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 fourth quarter and 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 a 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 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 Goldman Sachs Communicopia and Technology Conference in San Francisco on September 9, and the Piper Sandler Growth Frontiers Conference in Nashville on September 10th. We hope to see you at these events. Finally, our first quarter fiscal 2025 quiet period will begin on Friday, October 18th. And with that, I'll turn the call over to Rajiv. Rajiv?

Thank you, Rich, and good afternoon, everyone. Our fourth quarter was a solid finish to our 2024 fiscal year. We continue to see steady demand for our solutions driven by businesses prioritizing infrastructure modernization initiatives while looking to adopt hybrid multi-cloud operating models and optimize their total cost of ownership. In the fourth quarter, we are happy to have exceeded all our guided metrics. We delivered quarterly revenue of $548 million up 11% year-over-year and saw another quarter of strong free cash flow generation. We also saw the highest number of new logos we've seen in three years, an encouraging sign of building traction with some of our go-to-market partnerships and initiatives. Our full-year 2024 results demonstrated good progress on a number of fronts, financially, we delivered solid top-line performance driven by continued strong performance from our renewals business. We saw good growth in our pipeline of larger deals as we shifted our focus upmarket and saw increased engagement from prospects looking for alternatives to their existing infrastructure solutions. Even as our land and expand business underperformed, relative to our internal expectations, due to the longer than expected sales cycles we see, we delivered revenue of $2.15 billion, up 15% year over year, and ARR of $1.91 billion, up 22% year over year. Our bottom line performance was even stronger. we generated free cash flow of $598 million, almost three times higher than last year, resulting in a free cash flow margin of 28% and a Rule of 40 score of 43. In FY24, we also saw tangible progress on the partnership front with significant new or enhanced partnerships with Cisco, Dell, and NVIDIA. And I'm pleased that Dell Xe Plus, our new turnkey HCI-based appliance offering with Dell, is now generally available. We see these partnerships as both expanding our addressable market and providing us with meaningful go-to-market leverage. Finally, We continue to innovate in FI24 with important new product releases and enhancements to our Nutanix cloud platform. These included the launch of GPT in a box, our solution for streamlining the adoption of generative AI by enterprises. We made meaningful progress towards our goal of becoming the best platform for modern applications. including the launch of Nutanix Data Services for Kubernetes, or NDK, which offers consistent data services across both virtual machines and containerized apps, as well as the recent release of Nutanix Kubernetes Platform, or NKP, to simplify management of modern applications on-premises and in any native public cloud service. Our most significant wins in the quarter demonstrated the appeal of the Nutanix Cloud Platform to organizations that are looking to modernize their IT footprints and adopt hybrid cloud operating models, as well as those looking for alternatives in the wake of recent industry M&A. Our largest win in Q4 was a multi-million dollar ACV deal with a North American-based Fortune 100 financial services company. Following a roughly year and a half engagement with us, they chose to replace their existing solution with Nutanix Cloud Platform, including our AHV hypervisor, as well as Nutanix Cloud Manager. This customer, who had been using a competing HCI solution in much of their footprint, was able to utilize their existing hardware for their Nutanix software deployment, obviating the need for a hardware refresh. We also had a number of significant wins that included our Nutanix Cloud Clusters or NC2 capability, which enables workloads to be seamlessly and efficiently run in both private and public clouds. One of these was with an existing customer, an EMEA-based provider of global research services. This customer was looking to accelerate the migration of their workloads to the public cloud while ensuring the workloads once migrated were run as efficiently and cost-effectively as possible. Having already made a commitment to Microsoft Azure, they purchased licenses for Nutanix Cloud Platform through the Azure Marketplace with the intent of utilizing its NC2 capability to shift their on-prem workloads to Azure. Another good example was a significant new customer win with a top North American university. Most of our customers start with our platform on-prem. However, this customer was motivated by their decision to migrate away from a competing platform they were using to run their virtual machine workloads at scale in the public cloud on AWS due to dissatisfaction with recent changes at their existing supplier. They chose Nutanix Cloud Platform to migrate their applications running in the public cloud to our NC2 on AWS, while also adopting our Cloud Platform to run their on-prem workloads. They also plan on adopting Nutanix Cloud Manager for consistent self-service and automation across their private and public cloud estate. A final notable example is a win with an Asia-based Global 2000 semiconductor provider. This full-stack win, which was also a displacement of our primary competitor, enabled the customer to streamline their operations, increase their level of automation, and reduce their dependence on more expensive proprietary storage solutions. It included adoption of Nutanix Database Service, or NDB, to enable them to move off of their expensive commercial databases to open source databases managed by NDB. This customer also plans to adopt our unified storage solution, replacing multiple third-party storage options. Finally, they also plan on utilizing NC2 on Azure to enable them to shift applications to the public cloud, including performing lift and shifts of IT workloads of acquired companies. We see these events as reflecting the value customers see in our platform as they look for seamless and efficient application portability while adopting hybrid multi-cloud operating models, as well as the value of our partnerships with Azure and AWS. In closing, I am pleased with our solid Q4 and fiscal 2024 results and the progress we continue to make on multiple fronts, including our financial model, our partnerships, and our ongoing innovation in our cloud platform towards our goal of becoming the leading platform for running applications and managing data anywhere. We also remain focused on capitalizing on what we view as a long-term opportunity to gain share in face of recent industry disruption and are encouraged by our early successes, including some of the wins I just highlighted. Finally, I would like to express my sincere gratitude to our investors, customers, and partners for their trust in us and to our employees for their hard work that led to these results. And with that, I'll hand it over to Rukmini Sivaraman. Rukmini?