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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For the quarterly period ended January 31, 2021
OR
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For the transition period from
to
Commission File Number: 001-37883
NUTANIX, INC.
(Exact name of registrant as specified in its charter)
|
Delaware
|
|
27-0989767
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
1740 Technology Drive, Suite 150
San Jose, CA 95110
(Address of principal executive offices, including zip code)
(408) 216-8360
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
|
|
|
Title of each class
|
|
Trading symbol(s)
|
|
Name of each exchange on which registered
|
|
Class A Common Stock, $0.000025 par value per share
|
|
NTNX
|
|
Nasdaq Global Select Market
|
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90
days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule
12b-2 of the Exchange Act.
|
Large Accelerated Filer
|
|
☒
|
Accelerated Filer
|
|
☐
|
|
Non-accelerated Filer
|
|
☐
|
Smaller Reporting Company
|
|
☐
|
|
|
|
|
Emerging Growth Company
|
|
☐
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No ☒
As of February 28, 2021, the registrant had 193,515,427 shares of
Class A common stock, $0.000025 par value per share, and 10,766,100
shares of Class B common stock, $0.000025 par value per share,
outstanding.
TABLE OF CONTENTS
3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains express and implied
forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended ("Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended
("Exchange Act"), which statements involve substantial risks and
uncertainties. Other than statements of historical fact, all
statements contained in this Quarterly Report on Form 10-Q,
including statements regarding our future results of operations and
financial position, our business strategy and plans and our
objectives for future operations, are forward-looking statements.
The words "believe," "may," "will," "potentially," "estimate,"
"continue," "anticipate," "plan," "intend," "could," "would,"
"expect," or words or expressions of similar substance or the
negative thereof, that convey uncertainty of future events or
outcomes are intended to identify forward-looking statements.
Forward-looking statements included in this Quarterly Report on
Form 10-Q include, but are not limited to, statements
regarding:
|
|
•
|
our future
billings, revenue, cost of revenue and operating expenses, as well
as changes in the cost of product revenue, component costs, product
gross margins and support, entitlements and other services revenue
and changes in research and development, sales and marketing and
general and administrative expenses;
|
|
|
•
|
our business
plans, strategies, initiatives, objectives and outlook, as well as
our ability to execute such plans, strategies, initiatives and
objectives successfully and in a timely manner, and the benefits
and impact of such plans, initiatives and objectives on our
business, operations, and financial results, including any impact
on our revenue and product mix, average contract term lengths and
discounting behavior;
|
|
|
•
|
our plans
for, and the timing of, any current and future business model
transitions, including our ongoing transition to a
subscription-based business model, our ability to manage, complete
or realize the benefits of such transitions successfully and in a
timely manner, and the short-term and long-term impacts of such
transitions on our business, operations and financial
results;
|
|
|
•
|
the timing
and potential impact of the COVID-19 pandemic on the global market
environment and the IT industry, as well as on our business,
operations and financial results, including changes we have made or
anticipate making in response to the COVID-19 pandemic, our ability
to manage our business during the pandemic, and the position we
anticipate being in following the pandemic;
|
|
|
•
|
the benefits
and capabilities of our platform, solutions, products, services and
technology, including the interoperability and availability of our
solutions with and on third-party platforms;
|
|
|
•
|
our plans and
expectations regarding new solutions, products, services, product
features and technology, including those that are still under
development or in process;
|
|
|
•
|
our growth
strategy, our ability to effectively achieve and manage our growth,
and the amount, timing and impact of any investments to grow our
business, including any plans to increase or decrease investments
in our global engineering, research and development and sales
and/or marketing teams;
|
|
|
•
|
our
go-to-market strategy and the impact of any adjustments thereto,
including any adjustments to our go-to-market cost structure, in
particular, our sales compensation structure, and our plans
regarding pricing and packaging of our product
portfolio;
|
|
|
•
|
the success
and impact of our customer, partner, industry, analyst, investor
and employee events on our business, including on future pipeline
generation;
|
|
|
•
|
the impact of
our decision to use new or different metrics, or to make
adjustments to the metrics we use, to supplement our financial
reporting;
|
|
|
•
|
our ability
to successfully manage or realize the benefits of our Chief
Executive Officer transition, as well as the impact thereof on our
business, operations and financial results;
|
|
|
•
|
anticipated
trends, growth rates and challenges in our business and in the
markets in which we operate, including the segmentation and
productivity of our sales team;
|
|
|
•
|
market
acceptance of new technology and recently introduced
solutions;
|
|
|
•
|
our ability
to increase sales of our solutions, particularly to large
enterprise customers;
|
|
|
•
|
our ability
to attract new end customers and retain and grow sales from our
existing end customers;
|
|
|
•
|
our ability
to maintain and strengthen existing strategic alliances and
partnerships, including our relationships with our channel partners
and original equipment manufacturers, and for any new strategic
alliances and partnerships, and the impact of any changes to such
relationships on our business, operations and financial
results;
|
|
|
•
|
the effects
of seasonal trends on our results of operations;
|
4
|
|
•
|
our
expectations concerning relationships with third parties, including
our ability to compress and stabilize sales cycles;
|
|
|
•
|
our ability
to maintain, protect and enhance our intellectual
property;
|
|
|
•
|
our exposure
to and ability to guard against cyber attacks and other actual or
perceived security breaches;
|
|
|
•
|
our ability
to continue to expand internationally;
|
|
|
•
|
the
competitive market, including our ability to compete effectively,
the competitive advantages of our products, and the effects of
increased competition in our market;
|
|
|
•
|
anticipated
capital expenditures;
|
|
|
•
|
future
acquisitions or investments in complementary companies, products,
services or technologies and the ability to successfully integrate
completed acquisitions;
|
|
|
•
|
our ability
to stay in compliance with laws and regulations that currently
apply or become applicable to our business both in the United
States and internationally, including recent changes in global tax
laws;
|
|
|
•
|
macroeconomic
and industry trends, projected growth or trend analysis;
|
|
|
•
|
the impact of
events that may be outside of our control, such as political and
social unrest, terrorist attacks, hostilities, malicious human
acts, climate change, natural disasters (including extreme
weather), pandemics or other major public health concerns, and
other similar events;
|
|
|
•
|
our ability
to attract and retain qualified employees and key personnel;
and
|
|
|
•
|
the
sufficiency of cash balances to meet cash needs for at least the
next 12 months.
|
We have based these forward-looking statements largely on our
current expectations and projections about future events and trends
that we believe may affect our financial condition, results of
operations, business strategy, short-term and long-term business
operations and objectives and financial needs in light of the
information currently available to us. These forward-looking
statements are subject to a number of risks, uncertainties and
assumptions, including those described under the heading "Risk
Factors" in Part I, Item 1A of our Annual Report on Form 10-K for
our fiscal year ended July 31, 2020 and in Part II, Item 1A, "Risk
Factors" in this Quarterly Report on Form 10-Q. Moreover, we
operate in a very competitive and rapidly changing environment and
new risks emerge from time to time. It is not possible for us to
predict all risks, nor can we assess the impact of all factors on
our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained or implied in any forward-looking statements we may make.
In light of these risks, uncertainties and assumptions, the
forward-looking events and trends discussed in this Quarterly
Report on Form 10-Q may not occur and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements.
You should not rely upon forward-looking statements as predictions
of future events. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we
cannot guarantee that the future results, performance, or events
and circumstances reflected in the forward-looking statements will
be achieved or will occur. The forward-looking statements in this
Quarterly Report on Form 10-Q relate only to events as of the date
on which the statements are made. We undertake no obligation, and
expressly disclaim any obligation, to update, alter or otherwise
revise or publicly release the results of any revision to these
forward-looking statements to reflect new information or the
occurrence of unanticipated or subsequent events, except as
required by law. We may not actually achieve the plans, intentions
or expectations disclosed in our forward-looking statements and you
should not place undue reliance on our forward-looking
statements.
5
PART I.
FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
6
Table of Contents
NUTANIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
As of
|
|
|
|
|
July 31,
2020
|
|
|
January 31,
2021
|
|
|
|
|
(in thousands, except per share data)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
318,737
|
|
|
$
|
298,701
|
|
|
Short-term investments
|
|
|
401,041
|
|
|
|
990,138
|
|
|
Accounts receivable, net of allowances of $804 and $419,
respectively
|
|
|
242,516
|
|
|
|
164,868
|
|
|
Deferred commissions—current
|
|
|
68,694
|
|
|
|
92,025
|
|
|
Prepaid expenses and other current assets
|
|
|
63,032
|
|
|
|
69,994
|
|
|
Total current assets
|
|
|
1,094,020
|
|
|
|
1,615,726
|
|
|
Property and equipment, net
|
|
|
143,172
|
|
|
|
131,971
|
|
|
Operating lease right-of-use assets
|
|
|
127,326
|
|
|
|
121,066
|
|
|
Deferred commissions—non-current
|
|
|
146,834
|
|
|
|
191,180
|
|
|
Intangible assets, net
|
|
|
49,392
|
|
|
|
40,702
|
|
|
Goodwill
|
|
|
185,260
|
|
|
|
185,260
|
|
|
Other assets—non-current
|
|
|
22,543
|
|
|
|
25,547
|
|
|
Total assets
|
|
$
|
1,768,547
|
|
|
$
|
2,311,452
|
|
|
Liabilities and Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
54,029
|
|
|
$
|
52,459
|
|
|
Accrued compensation and benefits
|
|
|
109,109
|
|
|
|
151,014
|
|
|
Accrued expenses and other current liabilities
|
|
|
25,924
|
|
|
|
26,130
|
|
|
Deferred revenue—current
|
|
|
534,572
|
|
|
|
578,664
|
|
|
Operating lease liabilities—current
|
|
|
36,569
|
|
|
|
41,309
|
|
|
Total current liabilities
|
|
|
760,203
|
|
|
|
849,576
|
|
|
Deferred revenue—non-current
|
|
|
648,869
|
|
|
|
667,627
|
|
|
Operating lease liabilities—non-current
|
|
|
116,794
|
|
|
|
107,784
|
|
|
Convertible senior notes, net
|
|
|
490,222
|
|
|
|
1,011,725
|
|
|
Derivative liability
|
|
|
—
|
|
|
|
397,290
|
|
|
Other liabilities—non-current
|
|
|
27,436
|
|
|
|
35,842
|
|
|
Total liabilities
|
|
|
2,043,524
|
|
|
|
3,069,844
|
|
|
Commitments and contingencies (Note 7)
|
|
|
|
|
|
|
|
|
|
Stockholders’ deficit:
|
|
|
|
|
|
|
|
|
|
Preferred stock, par value of $0.000025 per share— 200,000
shares
authorized as of July 31, 2020 and January 31, 2021;
no shares
issued and outstanding as of July 31, 2020 and January
31, 2021
|
|
|
—
|
|
|
|
—
|
|
|
Common stock, par value of $0.000025 per share—1,200,000
(1,000,000
Class A, 200,000 Class B) shares authorized as of July
31, 2020 and
January 31, 2021; 201,949 (186,846 Class A and 15,103
Class B) and
204,238 (193,455 Class A and 10,783 Class B) shares
issued and
outstanding as of July 31, 2020 and January 31,
2021
|
|
|
5
|
|
|
|
5
|
|
|
Additional paid-in capital
|
|
|
2,245,180
|
|
|
|
2,386,579
|
|
|
Accumulated other comprehensive income
|
|
|
2,030
|
|
|
|
557
|
|
|
Accumulated deficit
|
|
|
(2,522,192
|
)
|
|
|
(3,145,533
|
)
|
|
Total stockholders’ deficit
|
|
|
(274,977
|
)
|
|
|
(758,392
|
)
|
|
Total liabilities and stockholders’ deficit
|
|
$
|
1,768,547
|
|
|
$
|
2,311,452
|
|
See the accompanying notes to condensed consolidated financial
statements.
7
Table of Contents
NUTANIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
|
|
Six Months Ended
January 31,
|
|
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
|
|
(in thousands, except per share data)
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
$
|
213,547
|
|
|
$
|
174,798
|
|
|
$
|
405,991
|
|
|
$
|
330,550
|
|
|
Support, entitlements and other services
|
|
|
133,220
|
|
|
|
171,584
|
|
|
|
255,544
|
|
|
|
328,586
|
|
|
Total revenue
|
|
|
346,767
|
|
|
|
346,382
|
|
|
|
661,535
|
|
|
|
659,136
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
|
20,676
|
|
|
|
13,784
|
|
|
|
41,909
|
|
|
|
26,598
|
|
|
Support, entitlements and other services
|
|
|
54,547
|
|
|
|
57,170
|
|
|
|
105,515
|
|
|
|
112,315
|
|
|
Total cost of revenue
|
|
|
75,223
|
|
|
|
70,954
|
|
|
|
147,424
|
|
|
|
138,913
|
|
|
Gross profit
|
|
|
271,544
|
|
|
|
275,428
|
|
|
|
514,111
|
|
|
|
520,223
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
304,936
|
|
|
|
261,071
|
|
|
|
596,774
|
|
|
|
518,361
|
|
|
Research and development
|
|
|
139,088
|
|
|
|
135,571
|
|
|
|
277,294
|
|
|
|
271,375
|
|
|
General and administrative
|
|
|
34,579
|
|
|
|
35,034
|
|
|
|
67,439
|
|
|
|
68,808
|
|
|
Total operating expenses
|
|
|
478,603
|
|
|
|
431,676
|
|
|
|
941,507
|
|
|
|
858,544
|
|
|
Loss from operations
|
|
|
(207,059
|
)
|
|
|
(156,248
|
)
|
|
|
(427,396
|
)
|
|
|
(338,321
|
)
|
|
Other expense, net
|
|
|
(5,863
|
)
|
|
|
(126,001
|
)
|
|
|
(10,903
|
)
|
|
|
(204,733
|
)
|
|
Loss before provision for income taxes
|
|
|
(212,922
|
)
|
|
|
(282,249
|
)
|
|
|
(438,299
|
)
|
|
|
(543,054
|
)
|
|
Provision for income taxes
|
|
|
4,642
|
|
|
|
5,141
|
|
|
|
8,565
|
|
|
|
9,384
|
|
|
Net loss
|
|
$
|
(217,564
|
)
|
|
$
|
(287,390
|
)
|
|
$
|
(446,864
|
)
|
|
$
|
(552,438
|
)
|
|
Net loss per share attributable to Class A and Class B
common stockholders—basic and diluted
|
|
$
|
(1.13
|
)
|
|
$
|
(1.42
|
)
|
|
$
|
(2.34
|
)
|
|
$
|
(2.72
|
)
|
|
Weighted average shares used in computing net loss
per share attributable to Class A and Class B
common stockholders—basic and diluted
|
|
|
192,727
|
|
|
|
202,520
|
|
|
|
191,199
|
|
|
|
202,798
|
|
See the accompanying notes to condensed consolidated financial
statements.
8
Table of Contents
NUTANIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
|
|
Six Months Ended
January 31,
|
|
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
|
|
(in thousands)
|
|
|
Net loss
|
|
$
|
(217,564
|
)
|
|
$
|
(287,390
|
)
|
|
$
|
(446,864
|
)
|
|
$
|
(552,438
|
)
|
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized (loss) gain on available-for-sale
securities, net of tax
|
|
|
(96
|
)
|
|
|
(323
|
)
|
|
|
469
|
|
|
|
(1,473
|
)
|
|
Comprehensive loss
|
|
$
|
(217,660
|
)
|
|
$
|
(287,713
|
)
|
|
$
|
(446,395
|
)
|
|
$
|
(553,911
|
)
|
See the accompanying notes to condensed consolidated financial
statements.
9
Table of Contents
NUTANIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(DEFICIT)
(Unaudited)
|
|
|
Six Months Ended January 31, 2020
|
|
|
|
|
Common Stock
|
|
|
Additional
Paid-In
|
|
|
Accumulated
Other
Comprehensive
|
|
|
Accumulated
|
|
|
Total
Stockholders’ Equity
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Income
|
|
|
Deficit
|
|
|
(Deficit)
|
|
|
|
|
(in thousands)
|
|
|
Balance - July 31, 2019
|
|
|
188,595
|
|
|
$
|
5
|
|
|
$
|
1,835,528
|
|
|
$
|
669
|
|
|
$
|
(1,649,309
|
)
|
|
$
|
186,893
|
|
|
Issuance of common stock through employee equity incentive
plans
|
|
|
2,620
|
|
|
|
—
|
|
|
|
2,608
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,608
|
|
|
Issuance of common stock from ESPP purchase
|
|
|
959
|
|
|
|
—
|
|
|
|
21,337
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,337
|
|
|
Stock-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
81,426
|
|
|
|
—
|
|
|
|
—
|
|
|
|
81,426
|
|
|
Other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
565
|
|
|
|
—
|
|
|
|
565
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(229,300
|
)
|
|
|
(229,300
|
)
|
|
Balance - October 31, 2019
|
|
|
192,174
|
|
|
|
5
|
|
|
|
1,940,899
|
|
|
|
1,234
|
|
|
|
(1,878,609
|
)
|
|
|
63,529
|
|
|
Issuance of common stock through employee equity incentive
plans
|
|
|
2,480
|
|
|
|
—
|
|
|
|
2,414
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,414
|
|
|
Stock-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
85,615
|
|
|
|
—
|
|
|
|
—
|
|
|
|
85,615
|
|
|
Other comprehensive loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(96
|
)
|
|
|
—
|
|
|
|
(96
|
)
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(217,564
|
)
|
|
|
(217,564
|
)
|
|
Balance - January 31, 2020
|
|
|
194,654
|
|
|
$
|
5
|
|
|
$
|
2,028,928
|
|
|
$
|
1,138
|
|
|
$
|
(2,096,173
|
)
|
|
$
|
(66,102
|
)
|
10
Table of Contents
|
|
|
Six Months Ended January 31, 2021
|
|
|
|
|
Common Stock
|
|
|
Additional
Paid-In
|
|
|
Accumulated
Other
Comprehensive
|
|
|
Accumulated
|
|
|
Total
Stockholders’
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Income
|
|
|
Deficit
|
|
|
Deficit
|
|
|
|
|
(in thousands)
|
|
|
Balance - July 31, 2020
|
|
|
201,949
|
|
|
$
|
5
|
|
|
$
|
2,245,180
|
|
|
$
|
2,030
|
|
|
$
|
(2,522,192
|
)
|
|
$
|
(274,977
|
)
|
|
Issuance of common stock through employee equity incentive
plans
|
|
|
3,117
|
|
|
|
—
|
|
|
|
1,631
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,631
|
|
|
Issuance of common stock from ESPP purchase
|
|
|
1,456
|
|
|
|
—
|
|
|
|
18,070
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18,070
|
|
|
Repurchase and retirement of common stock
|
|
|
(5,176
|
)
|
|
|
—
|
|
|
|
(54,176
|
)
|
|
|
—
|
|
|
|
(70,903
|
)
|
|
|
(125,079
|
)
|
|
Stock-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
89,198
|
|
|
|
—
|
|
|
|
—
|
|
|
|
89,198
|
|
|
Other comprehensive loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,150
|
)
|
|
|
—
|
|
|
|
(1,150
|
)
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(265,048
|
)
|
|
|
(265,048
|
)
|
|
Balance - October 31, 2020
|
|
|
201,346
|
|
|
|
5
|
|
|
|
2,299,903
|
|
|
|
880
|
|
|
|
(2,858,143
|
)
|
|
|
(557,355
|
)
|
|
Issuance of common stock through employee equity incentive
plans
|
|
|
2,892
|
|
|
|
—
|
|
|
|
2,222
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,222
|
|
|
Stock-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
84,454
|
|
|
|
—
|
|
|
|
—
|
|
|
|
84,454
|
|
|
Other comprehensive loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(323
|
)
|
|
|
—
|
|
|
|
(323
|
)
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(287,390
|
)
|
|
|
(287,390
|
)
|
|
Balance - January 31, 2021
|
|
|
204,238
|
|
|
$
|
5
|
|
|
$
|
2,386,579
|
|
|
$
|
557
|
|
|
$
|
(3,145,533
|
)
|
|
$
|
(758,392
|
)
|
See the accompanying notes to condensed consolidated financial
statements.
11
Table of Contents
NUTANIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Six Months Ended
January 31,
|
|
|
|
|
2020
|
|
|
2021
|
|
|
|
|
(in thousands)
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(446,864
|
)
|
|
$
|
(552,438
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
45,540
|
|
|
|
47,087
|
|
|
Stock-based compensation
|
|
|
167,041
|
|
|
|
173,652
|
|
|
Change in fair value of derivative liability
|
|
|
—
|
|
|
|
166,380
|
|
|
Amortization of debt discount and issuance costs
|
|
|
15,398
|
|
|
|
28,796
|
|
|
Operating lease cost, net of accretion
|
|
|
14,539
|
|
|
|
16,930
|
|
|
Impairment of lease-related assets
|
|
|
3,002
|
|
|
|
2,822
|
|
|
Non-cash interest expense
|
|
|
—
|
|
|
|
6,615
|
|
|
Other
|
|
|
(236
|
)
|
|
|
4,354
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(1,848
|
)
|
|
|
79,173
|
|
|
Deferred commissions
|
|
|
(35,422
|
)
|
|
|
(67,677
|
)
|
|
Prepaid expenses and other assets
|
|
|
9,064
|
|
|
|
(9,217
|
)
|
|
Accounts payable
|
|
|
(3,428
|
)
|
|
|
(2,602
|
)
|
|
Accrued compensation and benefits
|
|
|
20,085
|
|
|
|
39,593
|
|
|
Accrued expenses and other liabilities
|
|
|
974
|
|
|
|
2,100
|
|
|
Operating leases, net
|
|
|
(13,039
|
)
|
|
|
(16,523
|
)
|
|
Deferred revenue
|
|
|
146,540
|
|
|
|
61,325
|
|
|
Net cash used in operating activities
|
|
|
(78,654
|
)
|
|
|
(19,630
|
)
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Maturities of investments
|
|
|
299,380
|
|
|
|
260,852
|
|
|
Purchases of investments
|
|
|
(416,636
|
)
|
|
|
(859,576
|
)
|
|
Sales of investments
|
|
|
24,147
|
|
|
|
2,999
|
|
|
Purchases of property and equipment
|
|
|
(39,451
|
)
|
|
|
(25,168
|
)
|
|
Net cash used in investing activities
|
|
|
(132,560
|
)
|
|
|
(620,893
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from sales of shares through employee equity incentive
plans
|
|
|
26,486
|
|
|
|
21,904
|
|
|
Proceeds from the issuance of convertible notes, net of issuance
costs
|
|
|
—
|
|
|
|
723,617
|
|
|
Repurchases of common stock
|
|
|
—
|
|
|
|
(125,079
|
)
|
|
Net cash provided by financing activities
|
|
|
26,486
|
|
|
|
620,442
|
|
|
Net decrease in cash, cash equivalents and restricted cash
|
|
$
|
(184,728
|
)
|
|
$
|
(20,080
|
)
|
|
Cash, cash equivalents and restricted cash—beginning of period
|
|
|
399,520
|
|
|
|
321,991
|
|
|
Cash, cash equivalents and restricted cash—end of period
|
|
$
|
214,792
|
|
|
$
|
301,911
|
|
|
Restricted cash (1)
|
|
|
3,099
|
|
|
|
3,210
|
|
|
Cash and cash equivalents—end of period
|
|
$
|
211,693
|
|
|
$
|
298,701
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes
|
|
$
|
11,195
|
|
|
$
|
8,999
|
|
|
Supplemental disclosures of non-cash investing and financing
information:
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment included in accounts payable
and
accrued and other liabilities
|
|
$
|
13,997
|
|
|
$
|
7,621
|
|
|
Finance lease liabilities arising from obtaining right-of-use
assets
|
|
$
|
—
|
|
|
$
|
1,960
|
|
|
|
(1)
|
Included
within other assets—non-current in the condensed consolidated
balance sheets.
|
See the accompanying notes to condensed consolidated financial
statements.
12
Table of Contents
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE
1. OVERVIEW AND BASIS OF PRESENTATION
Organization and Description of Business
Nutanix, Inc. was incorporated in the state of Delaware in
September 2009. Nutanix, Inc. is headquartered in San Jose,
California, and together with its wholly-owned subsidiaries
(collectively, "we," "us," "our" or "Nutanix"), has operations
throughout North America, Europe, Asia Pacific, the Middle East,
Latin America and Africa.
We provide a leading enterprise cloud platform, which we call the
Nutanix Hybrid Cloud Platform, that consists of software solutions
and cloud services that power our customers' hybrid cloud and
multicloud strategies. Our solutions run across private-, hybrid-
and multicloud environments, and allow organizations to seamlessly
"lift and shift" their workloads, including enterprise
applications, high-performance databases, end-user computing and
virtual desktop infrastructure ("VDI") services, cloud native
workloads, and analytics applications, between different cloud
environments. Our solutions are primarily sold through channel
partners, including distributors, resellers and original equipment
manufacturers ("OEMs") (collectively, "Partners"), and delivered
directly to our end customers.
Principles of Consolidation and Significant Accounting Policies
The accompanying condensed consolidated financial statements, which
include the accounts of Nutanix, Inc. and its wholly-owned
subsidiaries, have been prepared in conformity with accounting
principles generally accepted in the United States ("U.S. GAAP")
and are consistent in all material respects with those included in
our Annual Report on Form 10-K for the fiscal year ended
July 31, 2020, filed with the Securities and Exchange
Commission ("SEC") on September 23, 2020. All intercompany accounts
and transactions have been eliminated in consolidation. The
condensed consolidated financial statements are unaudited, but
include all adjustments of a normal recurring nature necessary for
a fair presentation of our quarterly results. The consolidated
balance sheet as of July 31, 2020 is derived from audited
financial statements, however, it does not include all of the
information and footnotes required by U.S. GAAP for complete
financial statements. These condensed consolidated financial
statements should be read in conjunction with the consolidated
financial statements and related notes in our Annual Report on Form
10-K for the fiscal year ended July 31, 2020, which was filed
with the SEC on September 23, 2020.
Use of Estimates
The preparation of interim condensed consolidated financial
statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the amounts reported in the
condensed consolidated financial statements and accompanying notes.
Such management estimates and assumptions include, but are not
limited to, the best estimate of selling prices for products and
related support; useful lives and recoverability of intangible
assets and property and equipment; allowance for credit losses;
determination of fair value of stock-based awards; accounting for
income taxes, including the valuation allowance on deferred tax
assets and uncertain tax positions; warranty liability; purchase
commitment liabilities to our OEMs; sales commissions expense and
the period of benefit for deferred commissions; whether an
arrangement is or contains a lease; the incremental borrowing rate
to measure the present value of operating right-of-use assets and
lease liabilities; the inputs used to determine the fair value of
the contingent liability associated with the conversion feature of
the convertible senior notes due in 2026; and contingencies and
litigation. Management evaluates these estimates and assumptions on
an ongoing basis using historical experience and other factors and
makes adjustments when facts and circumstances dictate. As future
events and their effects cannot be determined with precision,
actual results could materially differ from those estimates and
assumptions.
In response to the ongoing and rapidly evolving COVID-19 pandemic,
we considered the impact of the estimated economic implications on
our critical and significant accounting estimates, including
assessment of collectibility of customer contracts, valuation of
accounts receivable, provision for purchase commitments to our OEMs
and impairment of long-lived assets, right-of-use assets, and
deferred commissions.
Concentration of Risk
Concentration of revenue and accounts receivable—We sell our products primarily through our
Partners and occasionally directly to end customers. For the three
and six months ended January 31, 2020 and 2021, no end
customer accounted for more than 10% of total revenue or accounts
receivable.
13
Table of Contents
NUTANIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(Unaudited)
For each significant Partner, revenue as a percentage of total
revenue and accounts receivable as a percentage of total accounts
receivable, net are as follows:
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
|
Six Months Ended
January 31,
|
|
|
Accounts Receivable
as of
|
|
|
Partners
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
July 31,
2020
|
|
|
January 31,
2021
|
|
|
Partner A
|
|
|
32
|
%
|
|
|
34
|
%
|
|
|
30
|
%
|
|
|
31
|
%
|
|
|
33
|
%
|
|
|
33
|
%
|
|
Partner B
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
11
|
%
|
|
|
(1
|
)
|
|
|
11
|
%
|
|
Partner C
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
11
|
%
|
|
Partner D
|
|
|
14
|
%
|
|