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Nutanix Generates Strong Deferred Revenue Growth

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Key deferred revenue growth drivers

Leading enterprise cloud solution provider Nutanix (NTNX) has maintained strong deferred revenue growth, driven by new deals and customer additions, namely Global 2000 clients. The company’s strategy to move toward a software-based business model may not only drive the company’s large deal momentum but also accelerate its deferred revenue. Demand for cloud management solutions across all enterprises, a strong portfolio, and strategic partnerships with other equipment manufacturers such as Lenovo, Dell (DVMT), and IBM (IBM) may also continue to boost deferred revenue.

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Growth analysis

In the last five quarters, Nutanix’s deferred revenue has grown at a compound annual rate of 12%. The graph above shows how the company’s deferred revenue has been boosted by large deals.

In fiscal 2Q18, Nutanix’s short- and long-term unearned revenue was ~$478 million, marking a 57% rise year-over-year. In fiscal 1H18, the company generated deferred revenue of $887 million, compared with $580 million in fiscal 1H17. Nutanix has 57 clients with over $5 million in lifetime bookings, 18 customers with over $10 million in lifetime bookings, and ten customers with more than $15 million in lifetime bookings.

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