Nutanix Stock Sinks Despite Q1 Outperformance But Retail Impressed

Nutanix CEO says the quarterly results demonstrated a good balance of top and bottom line performance with 18% year-over-year ARR growth and strong free cash flow generation.

Nutanix, Inc. ($NTNX), a hybrid multi-cloud computing company, announced better-than-expected fiscal-year 2025 first-quarter results but the stock slipped in early trading, as traders apparently weren't impressed with the guidance.

San Jose, California-based Nutanix reported non-GAAP earnings per share (EPS) of $0.42, well ahead of the $0.32 per share consensus.

Revenue rose 16% year-over-year (YoY) to $591 million compared to the consensus of $571.75 million and the company’s guidance of $565 million-$575 million.

Among the operational metrics, annual recurring revenue rose 18% YoY to $1.97 billion and average contract duration rose YoY from 2.9 years to 3.1 years.

Non-GAAP operating margin came in at 20%, a 440-basis-point improvement from a year ago.

Rajiv Ramaswami, President and CEO of Nutanix said, “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.”

For the second quarter, Nutanix expects revenue between $635 million and $645 million and non-GAAP operating margin between 20% and 21%.  The company maintained its fiscal year 2025 revenue guidance in the range of $2.435 billion to $2.465 billion. 

The consensus calls for quarterly and annual revenue of $636.81 million and $2.46 billion.

The company nudged up the low-end of its full-year non-GAAP operating margin guidance from 15.5% to 16% but maintained the high end at 17%.

Following the earnings release, a slew of analysts bumped up the price target for Nutanix stock, the Fly reported.

In early trading, the stock fell 2% to $70.90. It has rallied about 52% for the year-to-date period and hit an all-time closing high of $75.80 on an intraday basis on Tuesday.

Retail mood, however, is ‘extremely bullish’ (95/100) on the Stocktwits platform, reversing from the ‘bearish’ sentiment that prevailed a day ago. Message volume spiked to ‘extremely high’ levels.

A user on Stocktwits said Nutanix is a cloud infrastructure winner similar to Snowflake, Inc. ($SNOW).

Terming the earnings as “historical,” another user said the stock could run up to $100 by January.