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Q1 FYʹ17 Investor Presentation
November 29, 2016
2
SAFE HARBOR
Non-GAAP Financial Measures and Other Key Performance Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following
non-GAAP financial and other key performance measures: billings, adjusted gross margin percentages, non-GAAP net loss, pro forma non-GAAP net
loss per share, and free cash flow. In computing these non-GAAP financial measures, we exclude certain items such as stock-based compensation
and the related income tax impact, costs associated with our acquisitions (such as amortization of acquired intangible assets, revaluation of
contingent consideration, income tax related impact, and other acquisition-related costs), loss on debt extinguishment, and changes in the fair value
of our preferred stock warrant liability. Billings is a performance measure which our management believes provides useful information to investors
because it represents the amounts under binding purchase orders received by us during a given period that have been billed, and we calculate
billings by adding the change in deferred revenue between the start and end of the period to total revenue recognized in the same period. Free
cash flow is a performance measure that our management believes provides useful information to management and investors about the amountof
cash generated by the business after necessary capital expenditures, and we define free cash flow as net cash (used in) provided by operating
activities less purchases of property and equipment. We use these non-GAAP financial and key performance measures for financial and operational
decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures
provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures such as
stock-based compensation expense that may not be indicative of our ongoing core business operating results. However, these non-GAAP financial
and key performance measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our
results as reported under GAAP. Billings, adjusted gross margin percentages, non-GAAP net loss, pro forma non-GAAP net loss per share, and free
cash flow are not substitutes for total revenue, gross profit, net loss, net loss per share, or net cash (used in) provided by operating activities,
respectively. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures and key performance
measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial
measures and key performance measures as tools for comparison. We urge you to review the reconciliation of our non-GAAP financial measures and
key performance measures to the most directly comparable GAAP financial measures included below in the tables captioned “Reconciliation of
Revenue to Billings,” “Reconciliation of GAAP to Non-GAAP Results of Operations,” and “Reconciliation of GAAP Net Cash (Used In) Provided By
Operating Activities to Non-GAAP Free Cash Flow,” and not to rely on any single financial measure to evaluate our business.
Forward Looking Statements
This presentation contains express and implied forward-looking statements, including but not limited to statements relating to our long-term
financial model targets and our plans to achieve those targets. These forward-looking statements are not historical facts, and instead are based on
our current expectations, estimates, opinions and beliefs. Consequently, you should not rely on these forward-looking statements. The accuracy of
such forward-looking statements depends upon future events, and involves risks, uncertainties and other factors beyond our control that may cause
these statements to be inaccurate and cause our actual results, performance or achievements to differ materially and adversely from those
anticipated or implied by such statements, including, among others: the rapid evolution of the markets in which we compete; our ability to sustain
or manage future growth effectively; factors that could result in the significant fluctuation of our future quarterly operating results, including,
among other things, our revenue mix, the timing and magnitude of orders, shipments and acceptance of our solutions in any given quarter, our
ability to attract new and retain existing end-customers, and fluctuations in demand and competitive pricing pressures for our solutions; delays in or
lack of customer or market acceptance of our new product features or technology; the introduction, or acceleration of adoption of, competing
solutions, including public cloud infrastructure; and other risks detailed in our prospectus filed with the SEC on September 30, 2016 pursuant to Rule
424(b) under the Securities Act of 1933, as amended. Additional information will also be set forth in our Form 10-Q that will be filed for the quarter
ended October 31, 2016, which should be read in conjunction with these financial results. Our SEC filings are available on the Investor Relations
section of the company’s website at ir.nutanix.com and on the SEC's website at www.sec.gov. These forward-looking statements speak only as of
the date of this presentation and, except as required by law, we assume no obligation to update forward-looking statements to reflect actual results
or subsequent events or circumstances.
3
$240M billings, up 87% YoY
$167M total revenue, up
90% YoY
$375M in deferred revenue,
up 161% YoY
$100B+ TAM
Q1 FY2017 KEY HIGHLIGHTS
MARKET
4,473 customers, up 109%
YoY
376 Global 2000 customers
65% of bookings from
repeat customers
256 customers with >$1M in
lifetime bookings
34% of bookings from
international customers
CUSTOMERS
$347M in cash & ST inv.
DSO of 81 days, weighted
average DSO of 24 days
No inventory
BALANCE SHEET
GROWTH
Positive cash flow from
operations of $4M
Free cash flow of -$8M
LIQUIDITY
See appendix for reconciliation of Billings and Free Cash Flow to comparable GAAP metrics.
4
Q1ʹ17 Q4ʹ16
Q/Q
Change
Q1ʹ16 Y/Y Change
Revenue $166.8 $139.8 19% $87.8 90%
Billings* $239.8 $206.6 16% $128.3 87%
Gross Margin* 60.9% 61.3% -0.4 60.5% 0.4
OperatingLoss* -$44.4 -$43.3 -3% -$31.8 -40%
Net Loss Per
Share* **
-$0.37 -$0.39 $0.02 -$0.27 -$0.10
Cash Flow from
Operations
$4.2 $2.4 75% -$5.6 175%
Free Cash Flow* -$7.8 -$6.5 -20% -$15.3 49%
Q1 FISCAL YEAR 2017 FINANCIAL RESULTS
* Indicates Non-GAAP results or financial metric – see GAAP to Non-GAAP/metric reconciliations in appendix of this presentation.
**Assumes conversion of all preferred shares to common shares in prior periods.
Note: All amounts in millions, except for EPS and margin %.
5
By Quarter By Fiscal Year
STRONG REVENUE GROWTH
$31
$127
$241
$445
$167
$0
$100
$200
$300
$400
$500
$600
FY13 FY14 FY15 FY16 YTD17
$Millions
YoY Growth
%
364 316 90 84 N/A
$5 $6 $7
$14
$20
$32
$36 $39
$46
$57
$64
$74
$88
$103
$115
$140
$167
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
$Millions
FY15 FY17FY16FY14FY13
YoY Growth
%
-- 663 213 270 330 468 448 186 132 76 79 90 91 81 78 89 90
QoQ Growth
%
25 23 16 108 45 63 12 9 18 23 14 15 18 17 12 22 19
6
By Quarter By Fiscal Year
CONTINUOUS BILLINGS GROWTH
$42
$151
$309
$638
$240
$0
$100
$200
$300
$400
$500
$600
$700
$800
FY13 FY14 FY15 FY16 YTD17
$Millions
YoY Growth
%
-- 260 105 106 N/A
$5 $7 $8
$23 $23
$38 $43 $48
$61
$71
$82
$95
$128
$143
$160
$207
$240
$0
$50
$100
$150
$200
$250
$300
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
$Millions
FY15 FY17FY16FY14FY13
YoY Growth
%
-- -- -- -- 360 443 438 109 165 87 91 98 110 101 95 118 88
QoQ Growth
%
68 40 14 188 0 65 13 12 27 16 15 16 35 12 12 29 16
See Appendix for reconciliation of Billings to GAAP Revenue
7
$0
$100
$200
$300
$400
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
$Millions
LT Deferred Revenue ST Deferred Revenue
FY15 FY16 FY17
$3
$13
$83
$104
$144
$185
$230
$296
$375
FY14FY13
$65
$51
$36$28$21$15
$2$2
DEFERRED REVENUE BUILDS FOR THE
FUTURE
ST Deferred
Revenue $2 $2 $3 $6 $6 $9 $16 $20 $26 $33 $44 $53 $69 $86 $103 $130 $166
LT Deferred
Revenue -- -- -- $7 $9 $12 $12 $16 $25 $32 $39 $51 $75 $99 $127 $166 $209
8
CUSTOMER GROWTH METRICS SHOW
STRONG IMPROVEMENT
287 426 583
782 923
1,168
1,412
1,799
2,144
2,638
3,111
3,768
4,473
0
1,000
2,000
3,000
4,000
5,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Fast Growing Customer Acquisition
Cumulative Worldwide End-Customers
FY15 FY16 FY17FY14
1.0x
3.9x
15.5x
0
2
4
6
8
10
12
14
16
Initial Buy Customers >18 mos Top 25
Total Lifetime Purchase Multiples* **
* Multiples represent Total Lifetime Purchase / Initial Purchase.
**Top 25 is from IPO class of investors, for comparability.
9 12 18 26 35
47
60
80
108
136
154
208
256
0
100
200
300
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Cumulative End-Customers with Lifetime
Purchases >$1M**
FY15 FY16 FY1FY14
**Based on bookings.
66% 65%
34% 35%
0%
20%
40%
60%
80%
100%
Q1 16 Q1 17
New
Existing
Strong Repeat Business
New vs. Existing End-Customer Bookings
9
CUSTOMER COHORT BOOKING
CAPACITY COMPOUNDING
$-
$200
$400
$600
$800
$1,000
$1,200
2012 2013 2014 2015 2016
Cumulative Bookings by End-Customer Cohort*
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
*Classified according to the fiscal year in which an end-customer made its first purchase.
10
STRONG GROWTH IN THE GLOBAL 2000
38
63
79
106
123
155
172
211
237
272
305
353
376
0
100
200
300
400
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
FY15 FY16 FY17FY14
1.0x
7.3x
0
2
4
6
8
10
Initial Buy Global 2000 >18 mos
Cumulative Global 2000 Customers* Total Lifetime Purchase Multiples* **
*Reflects yearly update of the members of the Global 2000 list as reported
by Forbes. Global 2000 status is updated each fiscal year and historical data is
Revised to reflect the updated status.
**Multiples represent Total Lifetime Purchase / Initial Purchase.
11
LAND AND EXPAND STRATEGY AND
EXECUTION
Top 25
Customers* **
Fiscal Quarters
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1’17
Customer 1
Customer 2
Customer 3
Customer 4
Customer 5
Customer 6
Customer 7
Customer 8
Customer 9
Customer 10
Customer 11
Customer 12
Customer 13
Customer 14
Customer 15
Customer 16
Customer 17
Customer 18
Customer 19
Customer 20
Customer 21
Customer 22
Customer 23
Customer 24 Quarter of Initial Purchase
Customer 25 Repeat Purchase
* Top 25 lifetime purchases by End-Customers, sorted by initial first purchase quarter; excludes LX.
** Reflects yearly update of the members of the Global 2000 list as reported by Forbes. Global 2000 status is updated each fiscal year and historical data is
revised to reflect the updated status.
***Multiples represent Total Lifetime Purchase/Total Initial Purchase.
1.0x
3.9x
7.3x**
15.5x*
Initial Buy Customers
>18 months
G2000
Customers
> 18 Months
Top 25
Total Lifetime
Purchase Multiples***
12
INCREASING SOFTWARE CONTENT
2%
8%
14%
15%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
FY14 FY15 FY16 YTD17
Asa%ofBookings
By Fiscal Year
2% 2%
1%
2%
3%
4%
5%
8%
9%
11%
12%
14%
15%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Asa%ofBookings
By Quarter
(4-qtr rollingaverage)
FY15 FY16 FY17FY14
Note: Approx. 2/3 of OEM bookings are classified as software, approximately 1/3 is classified as support.
13
STEADY AHV ADOPTION, AS A % of NODES
6%
13%
17%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
FY15 FY16 YTD17
Asa%ofBookings
By Fiscal Year
0%
1%
3%
6% 6%
7%
9%
13%
17%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Asa%ofNodes
By Quarter
(4-qtr rollingaverage)
FY15 FY16 FY17
14
50% 50%
52%
56%
57%
59% 59%
60% 60%
63%
62%
61% 61%
45%
50%
55%
60%
65%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Gross Margin*
FY15 FY16FY14
-71%
-43%
-57%
-62%
-51%
-39%
-42%
-40%
-36%
-29%
-35%
-31%
-27%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Operating Margin*
FY15 FY16 FY17FY14
-44% -44%
-16%
-43%
-15% -14%
-9%
-7% -6%
4% 2% 2% 2%
-50%
-40%
-30%
-20%
-10%
0%
10%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Operating Cash Flow
FY15 FY16 FY17FY14
IMPROVING OPERATIONAL LEVERAGE
*Non-GAAP metrics shown. See appendix of this presentation for a reconciliations of GAAP to Non-GAAP metrics.
Percentages Indicated as a % of Revenue
-63%
-59%
-28%
-60%
-25% -25%
-17% -17% -17%
-6%
-10%
-5% -5%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Free Cash Flow*
FY16FY15FY14
FY17
FY17
15
139 179 230 273
342 392
470
571
686
798
894
968
1,127
106
137
171
208
246
292
337
375
419
470
528
598
737
27
45
59
70
76
88
106
120
136
168
212
242
305
35
48
57
66
74
91
104
114
127
153
164
172
188
0
500
1,000
1,500
2,000
2,500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
S&M
R&D
Support & Service
G&A
FY16 FY17
738
863
1,017
1,180
1,368
1,589
1,980
2,357*
FY15
1,798
FY14
617
517
409
307
FUNDING HEADCOUNT RESOURCES FOR
THE FUTURE
*Q1 FY’17 additions include 112 employees from the PernixData and Calm.io acquisitions.
16
BALANCE SHEET STRENGTHENED BY
RECENT IPO
$ Millions
Q1ʹ17
Actual
Q4ʹ16
Actual
Q/Q
Change
Q1ʹ16
Actual
Y/Y
Change
Cash and
ST Investments
$347.1 $112.3* 209% $136.2 155%
Accounts
Receivable
$147.7 $110.7 33% $48.1 207%
Days Sales
Outstanding**
81 73 8 days 50 31 days
WeightedDays
Sales Outstanding
24 31 -7 days 32 -8 days
Total
DeferredRevenue
$375.4 $296.5 27% $144.1 161%
• Does not include proceeds from senior notes.
**Calculated using revenue and ending accounts receivable
Note: In millions, except Days Sales Outstanding.
17
FY2014 FY2015 FY2016
YTD
FY2017
Target Long-
term Model
Gross Margin
(non-GAAP)¹
52% 59% 62% 61%
Revenue mix shifts more
toward software – ELAs,
Term-based Software
upgrades, OEM
63%-65%
R&D as % of Revenue
(non-GAAP)¹
28% 28% 25% 25%
Top line growth, optimize
engineering cost structure
13%-15%
S&M as % of Revenue
(non-GAAP)¹
71% 64% 63% 57%
Sales force maturity driving
full productivity, increased
OEM and channel leverage
and improved customer
acquisition costs
29%-32%
G&A as % of Revenue
(non-GAAP)¹
10% 8% 7% 6%
Top line growth, cost
efficiencies through scale
5%-6%
Non-GAAP Operating
Margin (non-GAAP)¹
-57% -42% -33% -27% - 15%-18%
Long-Term Tax Rate - - - -
Profitability and maintain
current domestic and
international
revenue splits
15%-20%
TARGET FINANCIAL MODEL
How We Get There
1
See appendix for reconciliation.
18
GAAP to NON-GAAP
RECONCILIATIONS
20
RECONCILATION OF NON-GAAP FINANCIAL MEASURES AND
KEY PERFORMANCE MEASURES--2014
Q1 Q2 Q3 Q4 Total
Billings
Revenue $ 19.8 $ 32.2 $ 36.0 $ 39.1 $ 127.1
Change in deferred revenue 3.0 5.4 6.8 8.8 24.0
Total billings $ 22.8 $ 37.6 $ 42.8 $ 47.9 $ 151.1
Reconciliation of GAAP to Non-GAAP
Gross profit - GAAP $ 9.9 $ 16.0 $ 18.6 $ 21.7 $ 66.2
Gross margin - GAAP 50 % 50 % 52 % 55 % 52 %
Stock-based compensation expense - - 0.1 0.2 0.3
Amortization of intangibles - - - - -
Gross profit - Non-GAAP $ 9.9 $ 16.0 $ 18.7 $ 21.9 $ 66.5
Gross margin - Non-GAAP 50 % 50 % 52 % 56 % 52 %
Sales and marketing - GAAP $ 16.0 $ 20.5 $ 25.6 $ 30.9 $ 93.0
Stock-based compensation expense (0.3) (0.4) (0.6) (0.9) (2.2)
Amortization of intangibles - - - - -
Sales and marketing - Non-GAAP $ 15.7 $ 20.1 $ 25.0 $ 30.0 $ 90.8
Research and development - GAAP $ 6.4 $ 7.7 $ 10.9 $ 13.0 $ 38.0
Stock-based compensation expense (0.4) (0.4) (0.6) (0.8) (2.2)
Research and development - Non-GAAP $ 6.0 $ 7.3 $ 10.3 $ 12.2 $ 35.8
General and administrative - GAAP $ 2.4 $ 2.6 $ 4.1 $ 4.4 $ 13.5
Stock-based compensation expense (0.1) (0.2) (0.3) (0.6) (1.2)
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
General and administrative - Non-GAAP $ 2.3 $ 2.4 $ 3.8 $ 3.8 $ 12.3
Operating expenses - GAAP $ 24.8 $ 30.8 $ 40.6 $ 48.3 $ 144.5
Stock-based compensation expense (0.8) (1.0) (1.5) (2.3) (5.6)
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
Amortization of intangibles - - - - -
Operating expenses - Non-GAAP $ 24.0 $ 29.8 $ 39.1 $ 46.0 $ 138.9
Loss from operations - GAAP $ (14.9) $ (14.8) $ (22.0) $ (26.6) $ (78.3)
Operating Margin - GAAP (75)% (46)% (61)% (68)% (62)%
Stock-based compensation expense 0.8 1.0 1.6 2.5 5.9
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
Amortization of intangibles - - - - -
Loss from operations - Non-GAAP $ (14.1) $ (13.8) $ (20.4) $ (24.1) $ (72.4)
Operating Margin - Non-GAAP (71)% (43)% (57)% (62)% (57)%
Net loss - GAAP $ (15.3) $ (15.8) $ (23.5) $ (29.4) $ (84.0)
Stock-based compensation expense 0.8 1.0 1.6 2.5 5.9
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
Amortization of intangibles - - - - -
Loss on debt extinguishment - - - - -
Warrant MtM 0.2 0.4 1.3 2.4 4.3
Income tax-related adjustments - - - - -
Net loss - Non-GAAP $ (14.3) $ (14.4) $ (20.6) $ (24.5) $ (73.8)
Net cash (used in) provided by operating activities $ (8.8) $ (14.3) $ (5.8) $ (16.9) $ (45.7)
Purchases of PPE (3.7) (4.7) (4.2) (6.4) (19.0)
Free cash flow $ (12.4) $ (19.0) $ (10.0) $ (23.3) $ (64.7)
(63)% (59)% (28)% (60)% (51)%
21
RECONCILATION OF NON-GAAP FINANCIAL MEASURES AND
KEY PERFORMANCE MEASURES--2015
Q1 Q2 Q3 Q4 Total
Billings
Revenue $ 46.0 $ 56.8 $ 64.5 $ 74.1 $ 241.4
Change in deferred revenue 14.7 14.2 17.6 20.6 67.1
Total billings $ 60.7 $ 71.0 $ 82.1 $ 94.7 $ 308.5
Reconciliation of GAAP to Non-GAAP
Gross profit - GAAP $ 26.2 $ 33.0 $ 37.5 $ 43.8 $ 140.5
Gross margin - GAAP 57 % 58 % 58 % 59 % 58 %
Stock-based compensation expense 0.2 0.3 0.3 0.3 1.1
Amortization of intangibles - - - - -
Gross profit - Non-GAAP $ 26.4 $ 33.3 $ 37.8 $ 44.1 $ 141.6
Gross margin - Non-GAAP 57 % 59 % 59 % 60 % 59 %
Sales and marketing - GAAP $ 33.1 $ 37.2 $ 42.8 $ 48.8 $ 161.9
Stock-based compensation expense (1.1) (1.4) (1.9) (2.1) (6.5)
Amortization of intangibles - - - - -
Sales and marketing - Non-GAAP $ 32.0 $ 35.8 $ 40.9 $ 46.7 $ 155.4
Research and development - GAAP $ 14.3 $ 16.7 $ 19.8 $ 22.7 $ 73.5
Stock-based compensation expense (1.1) (1.3) (1.4) (1.6) (5.4)
Research and development - Non-GAAP $ 13.2 $ 15.4 $ 18.4 $ 21.1 $ 68.1
General and administrative - GAAP $ 5.4 $ 5.3 $ 6.4 $ 6.8 $ 23.9
Stock-based compensation expense (0.8) (1.0) (1.0) (1.3) (4.1)
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
General and administrative - Non-GAAP $ 4.6 $ 4.3 $ 5.4 $ 5.5 $ 19.8
Operating expenses - GAAP $ 52.8 $ 59.2 $ 69.0 $ 78.3 $ 259.3
Stock-based compensation expense (3.0) (3.7) (4.3) (5.0) (16.0)
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
Amortization of intangibles - - - - -
Operating expenses - Non-GAAP $ 49.8 $ 55.5 $ 64.7 $ 73.3 $ 243.3
Loss from operations - GAAP $ (26.6) $ (26.2) $ (31.5) $ (34.5) $ (118.8)
Operating Margin - GAAP (58)% (46)% (49)% (47)% (49)%
Stock-based compensation expense 3.2 4.0 4.6 5.3 17.1
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
Amortization of intangibles - - - - -
Loss from operations - Non-GAAP $ (23.4) $ (22.2) $ (26.9) $ (29.2) $ (101.7)
Operating Margin - Non-GAAP (51)% (39)% (42)% (39)% (42)%
Net loss - GAAP $ (28.5) $ (27.8) $ (32.6) $ (37.2) $ (126.1)
Stock-based compensation expense 3.2 4.0 4.6 5.3 17.1
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
Amortization of intangibles - - - - -
Loss on debt extinguishment - - - - -
Warrant MtM 1.7 1.5 0.9 2.1 6.2
Income tax-related adjustments - - - - -
Net loss - Non-GAAP $ (23.6) $ (22.3) $ (27.1) $ (29.8) $ (102.8)
Net cash (used in) provided by operating activities $ (6.9) $ (7.7) $ (5.7) $ (5.4) $ (25.7)
Purchases of PPE (4.5) (6.4) (5.2) (7.2) (23.3)
Free cash flow $ (11.4) $ (14.1) $ (11.0) $ (12.6) $ (49.0)
(25)% (25)% (17)% (17)% (20)%
22
RECONCILATION OF NON-GAAP FINANCIAL MEASURES AND
KEY PERFORMANCE MEASURES--2016
Q1 Q2 Q3 Q4 Total
Billings
Revenue $ 87.8 $ 102.7 $ 114.6 $ 139.8 $ 444.9
Change in deferred revenue 40.5 40.7 44.9 66.8 192.9
Total billings $ 128.3 $ 143.4 $ 159.5 $ 206.6 $ 637.8
Reconciliation of GAAP to Non-GAAP
Gross profit - GAAP $ 52.7 $ 64.8 $ 71.2 $ 85.4 $ 274.1
Gross margin - GAAP 60 % 63 % 62 % 61 % 62 %
Stock-based compensation expense 0.4 0.3 0.4 0.3 1.4
Amortization of intangibles - - - - -
Gross profit - Non-GAAP $ 53.1 $ 65.1 $ 71.6 $ 85.7 $ 275.5
Gross margin - Non-GAAP 60 % 63 % 62 % 61 % 62 %
Sales and marketing - GAAP $ 58.6 $ 66.2 $ 75.8 $ 87.9 $ 288.5
Stock-based compensation expense (2.1) (2.0) (2.0) (1.9) (8.0)
Amortization of intangibles - - - - -
Sales and marketing - Non-GAAP $ 56.5 $ 64.2 $ 73.8 $ 86.0 $ 280.5
Research and development - GAAP $ 23.8 $ 26.0 $ 31.4 $ 35.1 $ 116.3
Stock-based compensation expense (1.6) (1.6) (1.5) (1.5) (6.2)
Research and development - Non-GAAP $ 22.2 $ 24.4 $ 29.9 $ 33.6 $ 110.1
General and administrative - GAAP $ 7.4 $ 7.8 $ 8.8 $ 10.3 $ 34.3
Stock-based compensation expense (1.3) (1.0) (1.2) (1.0) (4.5)
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
General and administrative - Non-GAAP $ 6.1 $ 6.8 $ 7.6 $ 9.3 $ 29.8
Operating expenses - GAAP $ 89.8 $ 100.0 $ 116.0 $ 133.3 $ 439.1
Stock-based compensation expense (5.0) (4.6) (4.7) (4.4) (18.7)
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
Amortization of intangibles - - - - -
Operating expenses - Non-GAAP $ 84.8 $ 95.4 $ 111.3 $ 128.9 $ 420.4
Loss from operations - GAAP $ (37.1) $ (35.2) $ (44.8) $ (47.9) $ (165.0)
Operating Margin - GAAP (42)% (34)% (39)% (34)% (37)%
Stock-based compensation expense 5.4 4.9 5.1 4.7 20.1
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
Amortization of intangibles - - - - -
Loss from operations - Non-GAAP $ (31.7) $ (30.3) $ (39.7) $ (43.2) $ (144.9)
Operating Margin - Non-GAAP (36)% (30)% (35)% (31)% (33)%
Net loss - GAAP $ (38.5) $ (33.3) $ (46.8) $ (49.9) $ (168.5)
Stock-based compensation expense 5.4 4.9 5.1 4.7 20.1
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
Amortization of intangibles - - - - -
Loss on debt extinguishment - - - - -
Warrant MtM 0.7 (2.6) 1.3 (1.4) (2.0)
Income tax-related adjustments - - - - -
Net loss - Non-GAAP $ (32.4) $ (31.0) $ (40.4) $ (46.6) $ (150.4)
Net cash (used in) provided by operating activities $ (5.6) $ 4.5 $ 2.4 $ 2.4 $ 3.6
Purchases of PPE (9.6) (10.4) (13.4) (8.9) (42.3)
Free cash flow $ (15.3) $ (5.9) $ (11.0) $ (6.5) $ (38.7)
(17)% (6)% (10)% (5)% (9)%
Pro forma basic and diluted EPS - GAAP $ (0.32) $ (0.28) $ (0.39) $ (0.41) $(1.40)
Stock-based compensation expense 0.05 0.04 0.04 0.04 0.17
Change in fair value of contingent consideration - - - - -
Acquisition related costs - - - - -
Amortization of intangibles - - - - -
Loss on debt extinguishment - - - - -
Warrant MtM 0.01 (0.02) 0.01 (0.01) (0.02)
Income tax-related adjustments - - - - -
Pro forma basic and diluted EPS - Non-GAAP $ (0.27) $ (0.26) $ (0.33) $ (0.39) $ (1.25)
23
RECONCILATION OF NON-GAAP FINANCIAL MEASURES AND
KEY PERFORMANCE MEASURES--2017
Q1 Q2 Q3 Q4 Total
Billings
Revenue $ 166.8 $ 166.8
Change in deferred revenue 73.0 73.0
Total billings $ 239.8 $ 239.8
Reconciliation of GAAP to Non-GAAP
Gross profit - GAAP $ 97.0 $ 97.0
Gross margin - GAAP 58 % 58 %
Stock-based compensation expense 4.3 4.3
Amortization of intangibles 0.2 0.2
Gross profit - Non-GAAP $ 101.6 $ 101.6
Gross margin - Non-GAAP 61 % 61 %
Sales and marketing - GAAP $ 128.8 $ 128.8
Stock-based compensation expense (33.9) (33.9)
Amortization of intangibles (0.2) (0.2)
Sales and marketing - Non-GAAP $ 94.7 $ 94.7
Research and development - GAAP $ 75.3 $ 75.3
Stock-based compensation expense (34.0) (34.0)
Research and development - Non-GAAP $ 41.3 $ 41.3
General and administrative - GAAP $ 29.4 $ 29.4
Stock-based compensation expense (18.5) (18.5)
Change in fair value of contingent consideration (0.2) (0.2)
Acquisition related costs (0.7) (0.7)
General and administrative - Non-GAAP $ 10.0 $ 10.0
Operating expenses - GAAP $ 233.4 $ 233.5
Stock-based compensation expense (86.4) (86.4)
Change in fair value of contingent consideration (0.2) (0.2)
Acquisition related costs (0.7) (0.7)
Amortization of intangibles (0.2) (0.2)
Operating expenses - Non-GAAP $ 146.0 $ 146.0
Loss from operations - GAAP $ (136.4) $ (136.4)
Operating Margin - GAAP (82)% (82)%
Stock-based compensation expense 90.7 90.7
Change in fair value of contingent consideration 0.2 0.2
Acquisition related costs 0.7 0.7
Amortization of intangibles 0.4 0.4
Loss from operations - Non-GAAP $ (44.4) $ (44.4)
Operating Margin - Non-GAAP (27)% (27)%
Net loss - GAAP $(162.2) $ (162.2)
Stock-based compensation expense 90.7 90.7
Change in fair value of contingent consideration 0.2 0.2
Acquisition related costs 0.7 0.7
Amortization of intangibles 0.4 0.4
Loss on debt extinguishment 3.3 3.3
Warrant MtM 21.1 21.1
Income tax-related adjustments (2.1) (2.1)
Net loss - Non-GAAP $ (47.8) $ (47.8)
Net cash (used in) provided by operating activities $ 4.2 $ 4.2
Purchases of PPE (11.9) (11.9)
Free cash flow $ (7.8) $ (7.8)
(5)% (5)%
Pro forma basic and diluted EPS - GAAP $ (1.26) $ (1.26)
Stock-based compensation expense 0.71 0.71
Change in fair value of contingent consideration 0.00 -
Acquisition related costs 0.01 0.01
Amortization of intangibles 0.00 -
Loss on debt extinguishment 0.03 0.03
Warrant MtM 0.16 0.16
Income tax-related adjustments (0.02) (0.02)
Pro forma basic and diluted EPS - Non-GAAP $ (0.37) $ (0.37)
24
© 2016 Nutanix, Inc. All rights reserved. Nutanix and the Nutanix logo are trademarks of Nutanix, Inc., registered in the United States and other countries.

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Q1 FYʹ17 Investor Presentation Highlights 87% Billings Growth

  • 1. Q1 FYʹ17 Investor Presentation November 29, 2016
  • 2. 2 SAFE HARBOR Non-GAAP Financial Measures and Other Key Performance Measures To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial and other key performance measures: billings, adjusted gross margin percentages, non-GAAP net loss, pro forma non-GAAP net loss per share, and free cash flow. In computing these non-GAAP financial measures, we exclude certain items such as stock-based compensation and the related income tax impact, costs associated with our acquisitions (such as amortization of acquired intangible assets, revaluation of contingent consideration, income tax related impact, and other acquisition-related costs), loss on debt extinguishment, and changes in the fair value of our preferred stock warrant liability. Billings is a performance measure which our management believes provides useful information to investors because it represents the amounts under binding purchase orders received by us during a given period that have been billed, and we calculate billings by adding the change in deferred revenue between the start and end of the period to total revenue recognized in the same period. Free cash flow is a performance measure that our management believes provides useful information to management and investors about the amountof cash generated by the business after necessary capital expenditures, and we define free cash flow as net cash (used in) provided by operating activities less purchases of property and equipment. We use these non-GAAP financial and key performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures such as stock-based compensation expense that may not be indicative of our ongoing core business operating results. However, these non-GAAP financial and key performance measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Billings, adjusted gross margin percentages, non-GAAP net loss, pro forma non-GAAP net loss per share, and free cash flow are not substitutes for total revenue, gross profit, net loss, net loss per share, or net cash (used in) provided by operating activities, respectively. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures and key performance measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures and key performance measures as tools for comparison. We urge you to review the reconciliation of our non-GAAP financial measures and key performance measures to the most directly comparable GAAP financial measures included below in the tables captioned “Reconciliation of Revenue to Billings,” “Reconciliation of GAAP to Non-GAAP Results of Operations,” and “Reconciliation of GAAP Net Cash (Used In) Provided By Operating Activities to Non-GAAP Free Cash Flow,” and not to rely on any single financial measure to evaluate our business. Forward Looking Statements This presentation contains express and implied forward-looking statements, including but not limited to statements relating to our long-term financial model targets and our plans to achieve those targets. These forward-looking statements are not historical facts, and instead are based on our current expectations, estimates, opinions and beliefs. Consequently, you should not rely on these forward-looking statements. The accuracy of such forward-looking statements depends upon future events, and involves risks, uncertainties and other factors beyond our control that may cause these statements to be inaccurate and cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by such statements, including, among others: the rapid evolution of the markets in which we compete; our ability to sustain or manage future growth effectively; factors that could result in the significant fluctuation of our future quarterly operating results, including, among other things, our revenue mix, the timing and magnitude of orders, shipments and acceptance of our solutions in any given quarter, our ability to attract new and retain existing end-customers, and fluctuations in demand and competitive pricing pressures for our solutions; delays in or lack of customer or market acceptance of our new product features or technology; the introduction, or acceleration of adoption of, competing solutions, including public cloud infrastructure; and other risks detailed in our prospectus filed with the SEC on September 30, 2016 pursuant to Rule 424(b) under the Securities Act of 1933, as amended. Additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended October 31, 2016, which should be read in conjunction with these financial results. Our SEC filings are available on the Investor Relations section of the company’s website at ir.nutanix.com and on the SEC's website at www.sec.gov. These forward-looking statements speak only as of the date of this presentation and, except as required by law, we assume no obligation to update forward-looking statements to reflect actual results or subsequent events or circumstances.
  • 3. 3 $240M billings, up 87% YoY $167M total revenue, up 90% YoY $375M in deferred revenue, up 161% YoY $100B+ TAM Q1 FY2017 KEY HIGHLIGHTS MARKET 4,473 customers, up 109% YoY 376 Global 2000 customers 65% of bookings from repeat customers 256 customers with >$1M in lifetime bookings 34% of bookings from international customers CUSTOMERS $347M in cash & ST inv. DSO of 81 days, weighted average DSO of 24 days No inventory BALANCE SHEET GROWTH Positive cash flow from operations of $4M Free cash flow of -$8M LIQUIDITY See appendix for reconciliation of Billings and Free Cash Flow to comparable GAAP metrics.
  • 4. 4 Q1ʹ17 Q4ʹ16 Q/Q Change Q1ʹ16 Y/Y Change Revenue $166.8 $139.8 19% $87.8 90% Billings* $239.8 $206.6 16% $128.3 87% Gross Margin* 60.9% 61.3% -0.4 60.5% 0.4 OperatingLoss* -$44.4 -$43.3 -3% -$31.8 -40% Net Loss Per Share* ** -$0.37 -$0.39 $0.02 -$0.27 -$0.10 Cash Flow from Operations $4.2 $2.4 75% -$5.6 175% Free Cash Flow* -$7.8 -$6.5 -20% -$15.3 49% Q1 FISCAL YEAR 2017 FINANCIAL RESULTS * Indicates Non-GAAP results or financial metric – see GAAP to Non-GAAP/metric reconciliations in appendix of this presentation. **Assumes conversion of all preferred shares to common shares in prior periods. Note: All amounts in millions, except for EPS and margin %.
  • 5. 5 By Quarter By Fiscal Year STRONG REVENUE GROWTH $31 $127 $241 $445 $167 $0 $100 $200 $300 $400 $500 $600 FY13 FY14 FY15 FY16 YTD17 $Millions YoY Growth % 364 316 90 84 N/A $5 $6 $7 $14 $20 $32 $36 $39 $46 $57 $64 $74 $88 $103 $115 $140 $167 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 $Millions FY15 FY17FY16FY14FY13 YoY Growth % -- 663 213 270 330 468 448 186 132 76 79 90 91 81 78 89 90 QoQ Growth % 25 23 16 108 45 63 12 9 18 23 14 15 18 17 12 22 19
  • 6. 6 By Quarter By Fiscal Year CONTINUOUS BILLINGS GROWTH $42 $151 $309 $638 $240 $0 $100 $200 $300 $400 $500 $600 $700 $800 FY13 FY14 FY15 FY16 YTD17 $Millions YoY Growth % -- 260 105 106 N/A $5 $7 $8 $23 $23 $38 $43 $48 $61 $71 $82 $95 $128 $143 $160 $207 $240 $0 $50 $100 $150 $200 $250 $300 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 $Millions FY15 FY17FY16FY14FY13 YoY Growth % -- -- -- -- 360 443 438 109 165 87 91 98 110 101 95 118 88 QoQ Growth % 68 40 14 188 0 65 13 12 27 16 15 16 35 12 12 29 16 See Appendix for reconciliation of Billings to GAAP Revenue
  • 7. 7 $0 $100 $200 $300 $400 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 $Millions LT Deferred Revenue ST Deferred Revenue FY15 FY16 FY17 $3 $13 $83 $104 $144 $185 $230 $296 $375 FY14FY13 $65 $51 $36$28$21$15 $2$2 DEFERRED REVENUE BUILDS FOR THE FUTURE ST Deferred Revenue $2 $2 $3 $6 $6 $9 $16 $20 $26 $33 $44 $53 $69 $86 $103 $130 $166 LT Deferred Revenue -- -- -- $7 $9 $12 $12 $16 $25 $32 $39 $51 $75 $99 $127 $166 $209
  • 8. 8 CUSTOMER GROWTH METRICS SHOW STRONG IMPROVEMENT 287 426 583 782 923 1,168 1,412 1,799 2,144 2,638 3,111 3,768 4,473 0 1,000 2,000 3,000 4,000 5,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Fast Growing Customer Acquisition Cumulative Worldwide End-Customers FY15 FY16 FY17FY14 1.0x 3.9x 15.5x 0 2 4 6 8 10 12 14 16 Initial Buy Customers >18 mos Top 25 Total Lifetime Purchase Multiples* ** * Multiples represent Total Lifetime Purchase / Initial Purchase. **Top 25 is from IPO class of investors, for comparability. 9 12 18 26 35 47 60 80 108 136 154 208 256 0 100 200 300 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Cumulative End-Customers with Lifetime Purchases >$1M** FY15 FY16 FY1FY14 **Based on bookings. 66% 65% 34% 35% 0% 20% 40% 60% 80% 100% Q1 16 Q1 17 New Existing Strong Repeat Business New vs. Existing End-Customer Bookings
  • 9. 9 CUSTOMER COHORT BOOKING CAPACITY COMPOUNDING $- $200 $400 $600 $800 $1,000 $1,200 2012 2013 2014 2015 2016 Cumulative Bookings by End-Customer Cohort* FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 *Classified according to the fiscal year in which an end-customer made its first purchase.
  • 10. 10 STRONG GROWTH IN THE GLOBAL 2000 38 63 79 106 123 155 172 211 237 272 305 353 376 0 100 200 300 400 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY15 FY16 FY17FY14 1.0x 7.3x 0 2 4 6 8 10 Initial Buy Global 2000 >18 mos Cumulative Global 2000 Customers* Total Lifetime Purchase Multiples* ** *Reflects yearly update of the members of the Global 2000 list as reported by Forbes. Global 2000 status is updated each fiscal year and historical data is Revised to reflect the updated status. **Multiples represent Total Lifetime Purchase / Initial Purchase.
  • 11. 11 LAND AND EXPAND STRATEGY AND EXECUTION Top 25 Customers* ** Fiscal Quarters Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1’17 Customer 1 Customer 2 Customer 3 Customer 4 Customer 5 Customer 6 Customer 7 Customer 8 Customer 9 Customer 10 Customer 11 Customer 12 Customer 13 Customer 14 Customer 15 Customer 16 Customer 17 Customer 18 Customer 19 Customer 20 Customer 21 Customer 22 Customer 23 Customer 24 Quarter of Initial Purchase Customer 25 Repeat Purchase * Top 25 lifetime purchases by End-Customers, sorted by initial first purchase quarter; excludes LX. ** Reflects yearly update of the members of the Global 2000 list as reported by Forbes. Global 2000 status is updated each fiscal year and historical data is revised to reflect the updated status. ***Multiples represent Total Lifetime Purchase/Total Initial Purchase. 1.0x 3.9x 7.3x** 15.5x* Initial Buy Customers >18 months G2000 Customers > 18 Months Top 25 Total Lifetime Purchase Multiples***
  • 12. 12 INCREASING SOFTWARE CONTENT 2% 8% 14% 15% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% FY14 FY15 FY16 YTD17 Asa%ofBookings By Fiscal Year 2% 2% 1% 2% 3% 4% 5% 8% 9% 11% 12% 14% 15% 0% 2% 4% 6% 8% 10% 12% 14% 16% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Asa%ofBookings By Quarter (4-qtr rollingaverage) FY15 FY16 FY17FY14 Note: Approx. 2/3 of OEM bookings are classified as software, approximately 1/3 is classified as support.
  • 13. 13 STEADY AHV ADOPTION, AS A % of NODES 6% 13% 17% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% FY15 FY16 YTD17 Asa%ofBookings By Fiscal Year 0% 1% 3% 6% 6% 7% 9% 13% 17% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Asa%ofNodes By Quarter (4-qtr rollingaverage) FY15 FY16 FY17
  • 14. 14 50% 50% 52% 56% 57% 59% 59% 60% 60% 63% 62% 61% 61% 45% 50% 55% 60% 65% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Gross Margin* FY15 FY16FY14 -71% -43% -57% -62% -51% -39% -42% -40% -36% -29% -35% -31% -27% -80% -70% -60% -50% -40% -30% -20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Operating Margin* FY15 FY16 FY17FY14 -44% -44% -16% -43% -15% -14% -9% -7% -6% 4% 2% 2% 2% -50% -40% -30% -20% -10% 0% 10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Operating Cash Flow FY15 FY16 FY17FY14 IMPROVING OPERATIONAL LEVERAGE *Non-GAAP metrics shown. See appendix of this presentation for a reconciliations of GAAP to Non-GAAP metrics. Percentages Indicated as a % of Revenue -63% -59% -28% -60% -25% -25% -17% -17% -17% -6% -10% -5% -5% -70% -60% -50% -40% -30% -20% -10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Free Cash Flow* FY16FY15FY14 FY17 FY17
  • 15. 15 139 179 230 273 342 392 470 571 686 798 894 968 1,127 106 137 171 208 246 292 337 375 419 470 528 598 737 27 45 59 70 76 88 106 120 136 168 212 242 305 35 48 57 66 74 91 104 114 127 153 164 172 188 0 500 1,000 1,500 2,000 2,500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 S&M R&D Support & Service G&A FY16 FY17 738 863 1,017 1,180 1,368 1,589 1,980 2,357* FY15 1,798 FY14 617 517 409 307 FUNDING HEADCOUNT RESOURCES FOR THE FUTURE *Q1 FY’17 additions include 112 employees from the PernixData and Calm.io acquisitions.
  • 16. 16 BALANCE SHEET STRENGTHENED BY RECENT IPO $ Millions Q1ʹ17 Actual Q4ʹ16 Actual Q/Q Change Q1ʹ16 Actual Y/Y Change Cash and ST Investments $347.1 $112.3* 209% $136.2 155% Accounts Receivable $147.7 $110.7 33% $48.1 207% Days Sales Outstanding** 81 73 8 days 50 31 days WeightedDays Sales Outstanding 24 31 -7 days 32 -8 days Total DeferredRevenue $375.4 $296.5 27% $144.1 161% • Does not include proceeds from senior notes. **Calculated using revenue and ending accounts receivable Note: In millions, except Days Sales Outstanding.
  • 17. 17 FY2014 FY2015 FY2016 YTD FY2017 Target Long- term Model Gross Margin (non-GAAP)¹ 52% 59% 62% 61% Revenue mix shifts more toward software – ELAs, Term-based Software upgrades, OEM 63%-65% R&D as % of Revenue (non-GAAP)¹ 28% 28% 25% 25% Top line growth, optimize engineering cost structure 13%-15% S&M as % of Revenue (non-GAAP)¹ 71% 64% 63% 57% Sales force maturity driving full productivity, increased OEM and channel leverage and improved customer acquisition costs 29%-32% G&A as % of Revenue (non-GAAP)¹ 10% 8% 7% 6% Top line growth, cost efficiencies through scale 5%-6% Non-GAAP Operating Margin (non-GAAP)¹ -57% -42% -33% -27% - 15%-18% Long-Term Tax Rate - - - - Profitability and maintain current domestic and international revenue splits 15%-20% TARGET FINANCIAL MODEL How We Get There 1 See appendix for reconciliation.
  • 18. 18
  • 20. 20 RECONCILATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES--2014 Q1 Q2 Q3 Q4 Total Billings Revenue $ 19.8 $ 32.2 $ 36.0 $ 39.1 $ 127.1 Change in deferred revenue 3.0 5.4 6.8 8.8 24.0 Total billings $ 22.8 $ 37.6 $ 42.8 $ 47.9 $ 151.1 Reconciliation of GAAP to Non-GAAP Gross profit - GAAP $ 9.9 $ 16.0 $ 18.6 $ 21.7 $ 66.2 Gross margin - GAAP 50 % 50 % 52 % 55 % 52 % Stock-based compensation expense - - 0.1 0.2 0.3 Amortization of intangibles - - - - - Gross profit - Non-GAAP $ 9.9 $ 16.0 $ 18.7 $ 21.9 $ 66.5 Gross margin - Non-GAAP 50 % 50 % 52 % 56 % 52 % Sales and marketing - GAAP $ 16.0 $ 20.5 $ 25.6 $ 30.9 $ 93.0 Stock-based compensation expense (0.3) (0.4) (0.6) (0.9) (2.2) Amortization of intangibles - - - - - Sales and marketing - Non-GAAP $ 15.7 $ 20.1 $ 25.0 $ 30.0 $ 90.8 Research and development - GAAP $ 6.4 $ 7.7 $ 10.9 $ 13.0 $ 38.0 Stock-based compensation expense (0.4) (0.4) (0.6) (0.8) (2.2) Research and development - Non-GAAP $ 6.0 $ 7.3 $ 10.3 $ 12.2 $ 35.8 General and administrative - GAAP $ 2.4 $ 2.6 $ 4.1 $ 4.4 $ 13.5 Stock-based compensation expense (0.1) (0.2) (0.3) (0.6) (1.2) Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - General and administrative - Non-GAAP $ 2.3 $ 2.4 $ 3.8 $ 3.8 $ 12.3 Operating expenses - GAAP $ 24.8 $ 30.8 $ 40.6 $ 48.3 $ 144.5 Stock-based compensation expense (0.8) (1.0) (1.5) (2.3) (5.6) Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - Amortization of intangibles - - - - - Operating expenses - Non-GAAP $ 24.0 $ 29.8 $ 39.1 $ 46.0 $ 138.9 Loss from operations - GAAP $ (14.9) $ (14.8) $ (22.0) $ (26.6) $ (78.3) Operating Margin - GAAP (75)% (46)% (61)% (68)% (62)% Stock-based compensation expense 0.8 1.0 1.6 2.5 5.9 Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - Amortization of intangibles - - - - - Loss from operations - Non-GAAP $ (14.1) $ (13.8) $ (20.4) $ (24.1) $ (72.4) Operating Margin - Non-GAAP (71)% (43)% (57)% (62)% (57)% Net loss - GAAP $ (15.3) $ (15.8) $ (23.5) $ (29.4) $ (84.0) Stock-based compensation expense 0.8 1.0 1.6 2.5 5.9 Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - Amortization of intangibles - - - - - Loss on debt extinguishment - - - - - Warrant MtM 0.2 0.4 1.3 2.4 4.3 Income tax-related adjustments - - - - - Net loss - Non-GAAP $ (14.3) $ (14.4) $ (20.6) $ (24.5) $ (73.8) Net cash (used in) provided by operating activities $ (8.8) $ (14.3) $ (5.8) $ (16.9) $ (45.7) Purchases of PPE (3.7) (4.7) (4.2) (6.4) (19.0) Free cash flow $ (12.4) $ (19.0) $ (10.0) $ (23.3) $ (64.7) (63)% (59)% (28)% (60)% (51)%
  • 21. 21 RECONCILATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES--2015 Q1 Q2 Q3 Q4 Total Billings Revenue $ 46.0 $ 56.8 $ 64.5 $ 74.1 $ 241.4 Change in deferred revenue 14.7 14.2 17.6 20.6 67.1 Total billings $ 60.7 $ 71.0 $ 82.1 $ 94.7 $ 308.5 Reconciliation of GAAP to Non-GAAP Gross profit - GAAP $ 26.2 $ 33.0 $ 37.5 $ 43.8 $ 140.5 Gross margin - GAAP 57 % 58 % 58 % 59 % 58 % Stock-based compensation expense 0.2 0.3 0.3 0.3 1.1 Amortization of intangibles - - - - - Gross profit - Non-GAAP $ 26.4 $ 33.3 $ 37.8 $ 44.1 $ 141.6 Gross margin - Non-GAAP 57 % 59 % 59 % 60 % 59 % Sales and marketing - GAAP $ 33.1 $ 37.2 $ 42.8 $ 48.8 $ 161.9 Stock-based compensation expense (1.1) (1.4) (1.9) (2.1) (6.5) Amortization of intangibles - - - - - Sales and marketing - Non-GAAP $ 32.0 $ 35.8 $ 40.9 $ 46.7 $ 155.4 Research and development - GAAP $ 14.3 $ 16.7 $ 19.8 $ 22.7 $ 73.5 Stock-based compensation expense (1.1) (1.3) (1.4) (1.6) (5.4) Research and development - Non-GAAP $ 13.2 $ 15.4 $ 18.4 $ 21.1 $ 68.1 General and administrative - GAAP $ 5.4 $ 5.3 $ 6.4 $ 6.8 $ 23.9 Stock-based compensation expense (0.8) (1.0) (1.0) (1.3) (4.1) Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - General and administrative - Non-GAAP $ 4.6 $ 4.3 $ 5.4 $ 5.5 $ 19.8 Operating expenses - GAAP $ 52.8 $ 59.2 $ 69.0 $ 78.3 $ 259.3 Stock-based compensation expense (3.0) (3.7) (4.3) (5.0) (16.0) Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - Amortization of intangibles - - - - - Operating expenses - Non-GAAP $ 49.8 $ 55.5 $ 64.7 $ 73.3 $ 243.3 Loss from operations - GAAP $ (26.6) $ (26.2) $ (31.5) $ (34.5) $ (118.8) Operating Margin - GAAP (58)% (46)% (49)% (47)% (49)% Stock-based compensation expense 3.2 4.0 4.6 5.3 17.1 Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - Amortization of intangibles - - - - - Loss from operations - Non-GAAP $ (23.4) $ (22.2) $ (26.9) $ (29.2) $ (101.7) Operating Margin - Non-GAAP (51)% (39)% (42)% (39)% (42)% Net loss - GAAP $ (28.5) $ (27.8) $ (32.6) $ (37.2) $ (126.1) Stock-based compensation expense 3.2 4.0 4.6 5.3 17.1 Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - Amortization of intangibles - - - - - Loss on debt extinguishment - - - - - Warrant MtM 1.7 1.5 0.9 2.1 6.2 Income tax-related adjustments - - - - - Net loss - Non-GAAP $ (23.6) $ (22.3) $ (27.1) $ (29.8) $ (102.8) Net cash (used in) provided by operating activities $ (6.9) $ (7.7) $ (5.7) $ (5.4) $ (25.7) Purchases of PPE (4.5) (6.4) (5.2) (7.2) (23.3) Free cash flow $ (11.4) $ (14.1) $ (11.0) $ (12.6) $ (49.0) (25)% (25)% (17)% (17)% (20)%
  • 22. 22 RECONCILATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES--2016 Q1 Q2 Q3 Q4 Total Billings Revenue $ 87.8 $ 102.7 $ 114.6 $ 139.8 $ 444.9 Change in deferred revenue 40.5 40.7 44.9 66.8 192.9 Total billings $ 128.3 $ 143.4 $ 159.5 $ 206.6 $ 637.8 Reconciliation of GAAP to Non-GAAP Gross profit - GAAP $ 52.7 $ 64.8 $ 71.2 $ 85.4 $ 274.1 Gross margin - GAAP 60 % 63 % 62 % 61 % 62 % Stock-based compensation expense 0.4 0.3 0.4 0.3 1.4 Amortization of intangibles - - - - - Gross profit - Non-GAAP $ 53.1 $ 65.1 $ 71.6 $ 85.7 $ 275.5 Gross margin - Non-GAAP 60 % 63 % 62 % 61 % 62 % Sales and marketing - GAAP $ 58.6 $ 66.2 $ 75.8 $ 87.9 $ 288.5 Stock-based compensation expense (2.1) (2.0) (2.0) (1.9) (8.0) Amortization of intangibles - - - - - Sales and marketing - Non-GAAP $ 56.5 $ 64.2 $ 73.8 $ 86.0 $ 280.5 Research and development - GAAP $ 23.8 $ 26.0 $ 31.4 $ 35.1 $ 116.3 Stock-based compensation expense (1.6) (1.6) (1.5) (1.5) (6.2) Research and development - Non-GAAP $ 22.2 $ 24.4 $ 29.9 $ 33.6 $ 110.1 General and administrative - GAAP $ 7.4 $ 7.8 $ 8.8 $ 10.3 $ 34.3 Stock-based compensation expense (1.3) (1.0) (1.2) (1.0) (4.5) Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - General and administrative - Non-GAAP $ 6.1 $ 6.8 $ 7.6 $ 9.3 $ 29.8 Operating expenses - GAAP $ 89.8 $ 100.0 $ 116.0 $ 133.3 $ 439.1 Stock-based compensation expense (5.0) (4.6) (4.7) (4.4) (18.7) Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - Amortization of intangibles - - - - - Operating expenses - Non-GAAP $ 84.8 $ 95.4 $ 111.3 $ 128.9 $ 420.4 Loss from operations - GAAP $ (37.1) $ (35.2) $ (44.8) $ (47.9) $ (165.0) Operating Margin - GAAP (42)% (34)% (39)% (34)% (37)% Stock-based compensation expense 5.4 4.9 5.1 4.7 20.1 Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - Amortization of intangibles - - - - - Loss from operations - Non-GAAP $ (31.7) $ (30.3) $ (39.7) $ (43.2) $ (144.9) Operating Margin - Non-GAAP (36)% (30)% (35)% (31)% (33)% Net loss - GAAP $ (38.5) $ (33.3) $ (46.8) $ (49.9) $ (168.5) Stock-based compensation expense 5.4 4.9 5.1 4.7 20.1 Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - Amortization of intangibles - - - - - Loss on debt extinguishment - - - - - Warrant MtM 0.7 (2.6) 1.3 (1.4) (2.0) Income tax-related adjustments - - - - - Net loss - Non-GAAP $ (32.4) $ (31.0) $ (40.4) $ (46.6) $ (150.4) Net cash (used in) provided by operating activities $ (5.6) $ 4.5 $ 2.4 $ 2.4 $ 3.6 Purchases of PPE (9.6) (10.4) (13.4) (8.9) (42.3) Free cash flow $ (15.3) $ (5.9) $ (11.0) $ (6.5) $ (38.7) (17)% (6)% (10)% (5)% (9)% Pro forma basic and diluted EPS - GAAP $ (0.32) $ (0.28) $ (0.39) $ (0.41) $(1.40) Stock-based compensation expense 0.05 0.04 0.04 0.04 0.17 Change in fair value of contingent consideration - - - - - Acquisition related costs - - - - - Amortization of intangibles - - - - - Loss on debt extinguishment - - - - - Warrant MtM 0.01 (0.02) 0.01 (0.01) (0.02) Income tax-related adjustments - - - - - Pro forma basic and diluted EPS - Non-GAAP $ (0.27) $ (0.26) $ (0.33) $ (0.39) $ (1.25)
  • 23. 23 RECONCILATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES--2017 Q1 Q2 Q3 Q4 Total Billings Revenue $ 166.8 $ 166.8 Change in deferred revenue 73.0 73.0 Total billings $ 239.8 $ 239.8 Reconciliation of GAAP to Non-GAAP Gross profit - GAAP $ 97.0 $ 97.0 Gross margin - GAAP 58 % 58 % Stock-based compensation expense 4.3 4.3 Amortization of intangibles 0.2 0.2 Gross profit - Non-GAAP $ 101.6 $ 101.6 Gross margin - Non-GAAP 61 % 61 % Sales and marketing - GAAP $ 128.8 $ 128.8 Stock-based compensation expense (33.9) (33.9) Amortization of intangibles (0.2) (0.2) Sales and marketing - Non-GAAP $ 94.7 $ 94.7 Research and development - GAAP $ 75.3 $ 75.3 Stock-based compensation expense (34.0) (34.0) Research and development - Non-GAAP $ 41.3 $ 41.3 General and administrative - GAAP $ 29.4 $ 29.4 Stock-based compensation expense (18.5) (18.5) Change in fair value of contingent consideration (0.2) (0.2) Acquisition related costs (0.7) (0.7) General and administrative - Non-GAAP $ 10.0 $ 10.0 Operating expenses - GAAP $ 233.4 $ 233.5 Stock-based compensation expense (86.4) (86.4) Change in fair value of contingent consideration (0.2) (0.2) Acquisition related costs (0.7) (0.7) Amortization of intangibles (0.2) (0.2) Operating expenses - Non-GAAP $ 146.0 $ 146.0 Loss from operations - GAAP $ (136.4) $ (136.4) Operating Margin - GAAP (82)% (82)% Stock-based compensation expense 90.7 90.7 Change in fair value of contingent consideration 0.2 0.2 Acquisition related costs 0.7 0.7 Amortization of intangibles 0.4 0.4 Loss from operations - Non-GAAP $ (44.4) $ (44.4) Operating Margin - Non-GAAP (27)% (27)% Net loss - GAAP $(162.2) $ (162.2) Stock-based compensation expense 90.7 90.7 Change in fair value of contingent consideration 0.2 0.2 Acquisition related costs 0.7 0.7 Amortization of intangibles 0.4 0.4 Loss on debt extinguishment 3.3 3.3 Warrant MtM 21.1 21.1 Income tax-related adjustments (2.1) (2.1) Net loss - Non-GAAP $ (47.8) $ (47.8) Net cash (used in) provided by operating activities $ 4.2 $ 4.2 Purchases of PPE (11.9) (11.9) Free cash flow $ (7.8) $ (7.8) (5)% (5)% Pro forma basic and diluted EPS - GAAP $ (1.26) $ (1.26) Stock-based compensation expense 0.71 0.71 Change in fair value of contingent consideration 0.00 - Acquisition related costs 0.01 0.01 Amortization of intangibles 0.00 - Loss on debt extinguishment 0.03 0.03 Warrant MtM 0.16 0.16 Income tax-related adjustments (0.02) (0.02) Pro forma basic and diluted EPS - Non-GAAP $ (0.37) $ (0.37)
  • 24. 24 © 2016 Nutanix, Inc. All rights reserved. Nutanix and the Nutanix logo are trademarks of Nutanix, Inc., registered in the United States and other countries.