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Q2 FY17 Financial Results

Nutanix reported strong revenue growth in Q2 FY2017, with total revenue of $182 million, up 77% year-over-year. Billings were $227 million, up 59% year-over-year. The company saw continued growth in customers, deferred revenue, and the Global 2000, demonstrating the expansion of its business. Nutanix provided non-GAAP financial measures and key performance indicators to supplement its GAAP reporting and measure business performance.

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Q2 FYʹ17 Investor Presentation March 2, 2017
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, non-GAAP gross margin percentage, 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-rela ted 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 amount of 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, non-GAAP gross margin percentage, 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 Non-GAAP Financial Measures and Key Performance Measures” 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, changes to the pricing of certain components of our solutions, 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 Quarterly Report on Form 10-Q for the quarter ended October 31, 2016, filed with the SEC on December 8, 2016. Additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended January 31, 2017, 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 $227M billings, up 59% YoY $182M total revenue, up 77% YoY $421M in deferred revenue, up 128% YoY $100B+ TAM Q2 FY2017 KEY HIGHLIGHTS MARKET 5,382 customers, up 104% YoY 473 Global 2000 customers 60% of bookings from repeat customers 295 customers with >$1M in lifetime bookings 48% of bookings from international customers CUSTOMERS $355M in cash & ST inv. DSO of 76 days, weighted average DSO of 24 days No inventory BALANCE SHEET GROWTH Cash flow from operations of $20M Free cash flow of $7M LIQUIDITY See appendix for reconciliation of Billings and Free Cash Flow to comparable GAAP metrics.
4 Q2ʹ17 Q1ʹ17 Q/Q Change Q2ʹ16 Y/Y Change Revenue $182.2 $166.8 9% $102.7 77% Billings* $227.4 $239.8 -5% $143.4 59% Gross Margin* 59.8% 60.9% -1.1 63.4% -3.6 OperatingLoss* -$38.8 -$44.4 13% -$30.3 -28% Net Loss Per Share* ** -$0.28 -$0.37 $0.09 -$0.26 -$0.02 Cash Flow from Operations $19.8 $4.2 375% $4.5 342% Free Cash Flow* $7.1 -$7.8 191% -$5.9 219% Q2 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 $349 $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 $182 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 $Millions FY15 FY17FY16FY14FY13 YoY Growth % -- 663 213 270 330 468 448 186 132 76 79 90 91 81 78 89 90 77 QoQ Growth % 25 23 16 108 45 63 12 9 18 23 14 15 18 17 12 22 19 9
6 By Quarter By Fiscal Year HISTORICAL BILLINGS PERFORMANCE $42 $151 $309 $638 $467 $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 $227 $0 $50 $100 $150 $200 $250 $300 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 $Millions FY15 FY17FY16FY14FY13 YoY Growth % -- -- -- -- 360 443 438 109 165 87 91 98 110 101 95 118 88 59 QoQ Growth % 68 40 14 188 0 65 13 12 27 16 15 16 35 12 12 29 16 -5 See Appendix for reconciliation of Billings to GAAP Revenue
7 $0 $100 $200 $300 $400 $500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 $Millions LT Deferred Revenue ST Deferred Revenue FY15 FY16 FY17 $3 $13 $83 $104 $144 $185 $230 $296 $375 FY14FY13 $6$51 $36$28$21$15$2$2 $421 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 $186 LT Deferred Revenue -- -- -- $7 $9 $12 $12 $16 $25 $32 $39 $51 $75 $99 $127 $166 $209 $235
8 STRONG CUSTOMER GROWTH METRICS 287 426 583 782 923 1,168 1,412 1,799 2,144 2,638 3,111 3,768 4,473 5,382 0 1,000 2,000 3,000 4,000 5,000 6,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Fast Growing Customer Acquisition Cumulative Worldwide End-Customers FY15 FY16 FY17FY14 1.0x 3.8x 16.1x 0 2 4 6 8 10 12 14 16 18 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 80 108 136 154 208 256 295 0 100 200 300 400 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Cumulative End-Customers with Lifetime Purchases >$1M** FY15 FY16 FY17FY14 **Based on bookings. 61% 60% 39% 40% 0% 20% 40% 60% 80% 100% Q2 16 Q2 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 41 66 82 109 127 159 177 214 242 281 318 372 424 473 0 100 200 300 400 500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY15 FY16 FY17FY14 1.0x 7.4x 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 Q2’17 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. **Multiples represent Total Lifetime Purchase/Total Initial Purchase. 1.0x 3.8x 16.1x Initial Buy Customers >18 months Top 25 Total Lifetime Purchase Multiples**
12 SOFTWARE CONTENT TRENDS 2% 2% 1% 2% 3% 4% 5% 8% 9% 11% 12% 14% 15% 15% 0% 2% 4% 6% 8% 10% 12% 14% 16% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 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 0% 1% 3% 6% 6% 7% 9% 13% 17% 21% 0% 5% 10% 15% 20% 25% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Asa%ofNodes By Quarter (4-qtr rollingaverage) FY15 FY16 FY17
14 50% 50% 52% 56% 57% 59% 59% 60% 60% 63% 62% 61% 61% 60% 45% 50% 55% 60% 65% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Gross Margin* FY15 FY16FY14 -71% -43% -57% -62% -51% -39% -42% -40% -36% -29% -35% -31% -27% -21% -80% -70% -60% -50% -40% -30% -20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Operating Margin* FY15 FY16 FY17FY14 -44% -44% -16% -43% -15% -14% -9% -7% -6% 4% 2% 2% 2% 11% -50% -40% -30% -20% -10% 0% 10% 20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Operating Cash Flow FY15 FY16 FY17FY14 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% 4% -70% -60% -50% -40% -30% -20% -10% 0% 10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Free Cash Flow* FY16FY15FY14 FY17 FY17
15 139 179 230 273 342 392 470 571 686 798 894 968 1,127 1,226 106 137 171 208 246 292 337 375 419 470 528 598 737 782 27 45 59 70 76 88 106 120 136 168 212 242 305 344 35 48 57 66 74 91 104 114 127 153 164 172 188 207 0 500 1,000 1,500 2,000 2,500 3,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 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 2,559 FUNDING HEADCOUNT RESOURCES FOR THE FUTURE *Q1 FY’17 additions include 112 employees from the PernixData and Calm.io acquisitions.
16 BALANCE SHEET TRENDS $ Millions Q2ʹ17 Actual Q1ʹ17 Actual Q/Q Change Q2ʹ16 Actual Y/Y Change Cash and ST Investments $355.2 $347.1 2.3% $129.1 175.1% Accounts Receivable $151.2 $147.7 2.4% $52.6 187.4% Days Sales Outstanding* 76 81 -5 days 47 29 days WeightedDays Sales Outstanding 24 24 -- 32 -8 days Total DeferredRevenue $420.6 $375.4 12.0% $184.8 127.6% *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% 60% 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% 24% Top line growth, optimize engineering cost structure 13%-15% S&M as % of Revenue (non-GAAP)¹ 71% 64% 63% 54% 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% -24% - 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 $ 182.2 $ 349.0 Change in deferred revenue 73.0 45.2 118.2 Total billings $ 239.8 $ 227.4 $ 467.2 Reconciliation of GAAP to Non-GAAP Gross profit - GAAP $ 97.0 $ 105.3 $ 202.3 Gross margin - GAAP 58 % 58 % 58 % Stock-based compensation expense 4.3 3.2 7.5 Amortization of intangibles 0.2 0.4 0.6 Gross profit - Non-GAAP $ 101.6 $ 108.9 $ 210.5 Gross margin - Non-GAAP 61 % 60 % 61 % Sales and marketing - GAAP $ 128.8 $ 111.2 $ 240.0 Stock-based compensation expense (33.9) (15.5) (49.4) Amortization of intangibles (0.2) (0.2) (0.4) Sales and marketing - Non-GAAP $ 94.7 $ 95.5 $ 190.2 Research and development - GAAP $ 75.3 $ 70.9 $ 146.2 Stock-based compensation expense (34.0) (28.8) (62.8) Research and development - Non-GAAP $ 41.3 $ 42.2 $ 83.5 General and administrative - GAAP $ 29.4 $ 15.5 $ 44.9 Stock-based compensation expense (18.5) (5.1) (23.6) Change in fair value of contingent consideration (0.2) (0.3) (0.5) Acquisition related costs (0.7) - (0.7) General and administrative - Non-GAAP $ 10.0 $ 10.1 $ 20.1 Operating expenses - GAAP $ 233.4 $ 197.6 $ 431.0 Stock-based compensation expense (86.4) (49.4) (135.8) Change in fair value of contingent consideration (0.2) (0.3) (0.5) Acquisition related costs (0.7) - (0.7) Amortization of intangibles (0.2) (0.2) (0.4) Operating expenses - Non-GAAP $ 146.0 $ 147.7 $ 293.7 Loss from operations - GAAP $ (136.4) $ (92.3) $ (228.7) Operating Margin - GAAP (82)% (51)% (67)% Stock-based compensation expense 90.7 52.6 143.3 Change in fair value of contingent consideration 0.2 0.3 0.5 Acquisition related costs 0.7 - 0.7 Amortization of intangibles 0.4 0.6 1.0 Loss from operations - Non-GAAP $ (44.4) $ (38.8) $ (83.2) Operating Margin - Non-GAAP (27)% (21)% (24)% Net loss - GAAP $(162.2) $ (93.2) $ (255.4) Stock-based compensation expense 90.7 52.6 143.3 Change in fair value of contingent consideration 0.2 0.3 0.5 Acquisition related costs 0.7 - 0.7 Amortization of intangibles 0.4 0.6 1.0 Loss on debt extinguishment 3.3 - 3.3 Warrant MtM 21.1 - 21.1 Income tax-related adjustments (2.1) (0.2) (2.3) Net loss - Non-GAAP $ (47.8) $ (39.9) $ (87.7) Net cash (used in) provided by operating activities $ 4.2 $ 19.8 $ 24.0 Purchases of PPE (11.9) (12.7) (24.6) Free cash flow $ (7.8) $ 7.1 $ (0.7) (5)% 4% 1% Pro forma basic and diluted EPS - GAAP $ (1.26) $ (0.66) $ (1.92) Stock-based compensation expense 0.71 0.37 1.08 Change in fair value of contingent consideration 0.00 0.00 - Acquisition related costs 0.01 0.00 0.01 Amortization of intangibles 0.00 0.01 0.01 Loss on debt extinguishment 0.03 0.00 0.03 Warrant MtM 0.16 0.00 0.16 Income tax-related adjustments (0.02) 0.00 (0.02) Pro forma basic and diluted EPS - Non-GAAP $ (0.37) $ (0.28) $ (0.65)
24 © 2017 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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Q2 FY17 Financial Results

  • 1.
    Q2 FYʹ17 InvestorPresentation March 2, 2017
  • 2.
    2 SAFE HARBOR Non-GAAP FinancialMeasures 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, non-GAAP gross margin percentage, 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-rela ted 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 amount of 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, non-GAAP gross margin percentage, 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 Non-GAAP Financial Measures and Key Performance Measures” 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, changes to the pricing of certain components of our solutions, 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 Quarterly Report on Form 10-Q for the quarter ended October 31, 2016, filed with the SEC on December 8, 2016. Additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended January 31, 2017, 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 $227M billings, up59% YoY $182M total revenue, up 77% YoY $421M in deferred revenue, up 128% YoY $100B+ TAM Q2 FY2017 KEY HIGHLIGHTS MARKET 5,382 customers, up 104% YoY 473 Global 2000 customers 60% of bookings from repeat customers 295 customers with >$1M in lifetime bookings 48% of bookings from international customers CUSTOMERS $355M in cash & ST inv. DSO of 76 days, weighted average DSO of 24 days No inventory BALANCE SHEET GROWTH Cash flow from operations of $20M Free cash flow of $7M LIQUIDITY See appendix for reconciliation of Billings and Free Cash Flow to comparable GAAP metrics.
  • 4.
    4 Q2ʹ17 Q1ʹ17 Q/Q Change Q2ʹ16 Y/YChange Revenue $182.2 $166.8 9% $102.7 77% Billings* $227.4 $239.8 -5% $143.4 59% Gross Margin* 59.8% 60.9% -1.1 63.4% -3.6 OperatingLoss* -$38.8 -$44.4 13% -$30.3 -28% Net Loss Per Share* ** -$0.28 -$0.37 $0.09 -$0.26 -$0.02 Cash Flow from Operations $19.8 $4.2 375% $4.5 342% Free Cash Flow* $7.1 -$7.8 191% -$5.9 219% Q2 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 ByFiscal Year STRONG REVENUE GROWTH $31 $127 $241 $445 $349 $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 $182 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 $Millions FY15 FY17FY16FY14FY13 YoY Growth % -- 663 213 270 330 468 448 186 132 76 79 90 91 81 78 89 90 77 QoQ Growth % 25 23 16 108 45 63 12 9 18 23 14 15 18 17 12 22 19 9
  • 6.
    6 By Quarter ByFiscal Year HISTORICAL BILLINGS PERFORMANCE $42 $151 $309 $638 $467 $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 $227 $0 $50 $100 $150 $200 $250 $300 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 $Millions FY15 FY17FY16FY14FY13 YoY Growth % -- -- -- -- 360 443 438 109 165 87 91 98 110 101 95 118 88 59 QoQ Growth % 68 40 14 188 0 65 13 12 27 16 15 16 35 12 12 29 16 -5 See Appendix for reconciliation of Billings to GAAP Revenue
  • 7.
    7 $0 $100 $200 $300 $400 $500 Q1 Q2 Q3Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 $Millions LT Deferred Revenue ST Deferred Revenue FY15 FY16 FY17 $3 $13 $83 $104 $144 $185 $230 $296 $375 FY14FY13 $6$51 $36$28$21$15$2$2 $421 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 $186 LT Deferred Revenue -- -- -- $7 $9 $12 $12 $16 $25 $32 $39 $51 $75 $99 $127 $166 $209 $235
  • 8.
    8 STRONG CUSTOMER GROWTHMETRICS 287 426 583 782 923 1,168 1,412 1,799 2,144 2,638 3,111 3,768 4,473 5,382 0 1,000 2,000 3,000 4,000 5,000 6,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Fast Growing Customer Acquisition Cumulative Worldwide End-Customers FY15 FY16 FY17FY14 1.0x 3.8x 16.1x 0 2 4 6 8 10 12 14 16 18 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 80 108 136 154 208 256 295 0 100 200 300 400 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Cumulative End-Customers with Lifetime Purchases >$1M** FY15 FY16 FY17FY14 **Based on bookings. 61% 60% 39% 40% 0% 20% 40% 60% 80% 100% Q2 16 Q2 17 New Existing Strong Repeat Business New vs. Existing End-Customer Bookings
  • 9.
    9 CUSTOMER COHORT BOOKING CAPACITYCOMPOUNDING $- $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 INTHE GLOBAL 2000 41 66 82 109 127 159 177 214 242 281 318 372 424 473 0 100 200 300 400 500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY15 FY16 FY17FY14 1.0x 7.4x 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 EXPANDSTRATEGY 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 Q2’17 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. **Multiples represent Total Lifetime Purchase/Total Initial Purchase. 1.0x 3.8x 16.1x Initial Buy Customers >18 months Top 25 Total Lifetime Purchase Multiples**
  • 12.
    12 SOFTWARE CONTENT TRENDS 2%2% 1% 2% 3% 4% 5% 8% 9% 11% 12% 14% 15% 15% 0% 2% 4% 6% 8% 10% 12% 14% 16% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 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 0% 1% 3% 6% 6% 7% 9% 13% 17% 21% 0% 5% 10% 15% 20% 25% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 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% 60% 45% 50% 55% 60% 65% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Gross Margin* FY15 FY16FY14 -71% -43% -57% -62% -51% -39% -42% -40% -36% -29% -35% -31% -27% -21% -80% -70% -60% -50% -40% -30% -20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Operating Margin* FY15 FY16 FY17FY14 -44% -44% -16% -43% -15% -14% -9% -7% -6% 4% 2% 2% 2% 11% -50% -40% -30% -20% -10% 0% 10% 20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Operating Cash Flow FY15 FY16 FY17FY14 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% 4% -70% -60% -50% -40% -30% -20% -10% 0% 10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Free Cash Flow* FY16FY15FY14 FY17 FY17
  • 15.
    15 139 179 230273 342 392 470 571 686 798 894 968 1,127 1,226 106 137 171 208 246 292 337 375 419 470 528 598 737 782 27 45 59 70 76 88 106 120 136 168 212 242 305 344 35 48 57 66 74 91 104 114 127 153 164 172 188 207 0 500 1,000 1,500 2,000 2,500 3,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 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 2,559 FUNDING HEADCOUNT RESOURCES FOR THE FUTURE *Q1 FY’17 additions include 112 employees from the PernixData and Calm.io acquisitions.
  • 16.
    16 BALANCE SHEET TRENDS $Millions Q2ʹ17 Actual Q1ʹ17 Actual Q/Q Change Q2ʹ16 Actual Y/Y Change Cash and ST Investments $355.2 $347.1 2.3% $129.1 175.1% Accounts Receivable $151.2 $147.7 2.4% $52.6 187.4% Days Sales Outstanding* 76 81 -5 days 47 29 days WeightedDays Sales Outstanding 24 24 -- 32 -8 days Total DeferredRevenue $420.6 $375.4 12.0% $184.8 127.6% *Calculated using revenue and ending accounts receivable Note: In millions, except Days Sales Outstanding.
  • 17.
    17 FY2014 FY2015 FY2016 YTD FY2017 TargetLong- term Model Gross Margin (non-GAAP)¹ 52% 59% 62% 60% 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% 24% Top line growth, optimize engineering cost structure 13%-15% S&M as % of Revenue (non-GAAP)¹ 71% 64% 63% 54% 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% -24% - 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.
  • 19.
  • 20.
    20 RECONCILATION OF NON-GAAPFINANCIAL 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-GAAPFINANCIAL 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-GAAPFINANCIAL 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-GAAPFINANCIAL MEASURES AND KEY PERFORMANCE MEASURES--2017 Q1 Q2 Q3 Q4 Total Billings Revenue $ 166.8 $ 182.2 $ 349.0 Change in deferred revenue 73.0 45.2 118.2 Total billings $ 239.8 $ 227.4 $ 467.2 Reconciliation of GAAP to Non-GAAP Gross profit - GAAP $ 97.0 $ 105.3 $ 202.3 Gross margin - GAAP 58 % 58 % 58 % Stock-based compensation expense 4.3 3.2 7.5 Amortization of intangibles 0.2 0.4 0.6 Gross profit - Non-GAAP $ 101.6 $ 108.9 $ 210.5 Gross margin - Non-GAAP 61 % 60 % 61 % Sales and marketing - GAAP $ 128.8 $ 111.2 $ 240.0 Stock-based compensation expense (33.9) (15.5) (49.4) Amortization of intangibles (0.2) (0.2) (0.4) Sales and marketing - Non-GAAP $ 94.7 $ 95.5 $ 190.2 Research and development - GAAP $ 75.3 $ 70.9 $ 146.2 Stock-based compensation expense (34.0) (28.8) (62.8) Research and development - Non-GAAP $ 41.3 $ 42.2 $ 83.5 General and administrative - GAAP $ 29.4 $ 15.5 $ 44.9 Stock-based compensation expense (18.5) (5.1) (23.6) Change in fair value of contingent consideration (0.2) (0.3) (0.5) Acquisition related costs (0.7) - (0.7) General and administrative - Non-GAAP $ 10.0 $ 10.1 $ 20.1 Operating expenses - GAAP $ 233.4 $ 197.6 $ 431.0 Stock-based compensation expense (86.4) (49.4) (135.8) Change in fair value of contingent consideration (0.2) (0.3) (0.5) Acquisition related costs (0.7) - (0.7) Amortization of intangibles (0.2) (0.2) (0.4) Operating expenses - Non-GAAP $ 146.0 $ 147.7 $ 293.7 Loss from operations - GAAP $ (136.4) $ (92.3) $ (228.7) Operating Margin - GAAP (82)% (51)% (67)% Stock-based compensation expense 90.7 52.6 143.3 Change in fair value of contingent consideration 0.2 0.3 0.5 Acquisition related costs 0.7 - 0.7 Amortization of intangibles 0.4 0.6 1.0 Loss from operations - Non-GAAP $ (44.4) $ (38.8) $ (83.2) Operating Margin - Non-GAAP (27)% (21)% (24)% Net loss - GAAP $(162.2) $ (93.2) $ (255.4) Stock-based compensation expense 90.7 52.6 143.3 Change in fair value of contingent consideration 0.2 0.3 0.5 Acquisition related costs 0.7 - 0.7 Amortization of intangibles 0.4 0.6 1.0 Loss on debt extinguishment 3.3 - 3.3 Warrant MtM 21.1 - 21.1 Income tax-related adjustments (2.1) (0.2) (2.3) Net loss - Non-GAAP $ (47.8) $ (39.9) $ (87.7) Net cash (used in) provided by operating activities $ 4.2 $ 19.8 $ 24.0 Purchases of PPE (11.9) (12.7) (24.6) Free cash flow $ (7.8) $ 7.1 $ (0.7) (5)% 4% 1% Pro forma basic and diluted EPS - GAAP $ (1.26) $ (0.66) $ (1.92) Stock-based compensation expense 0.71 0.37 1.08 Change in fair value of contingent consideration 0.00 0.00 - Acquisition related costs 0.01 0.00 0.01 Amortization of intangibles 0.00 0.01 0.01 Loss on debt extinguishment 0.03 0.00 0.03 Warrant MtM 0.16 0.00 0.16 Income tax-related adjustments (0.02) 0.00 (0.02) Pro forma basic and diluted EPS - Non-GAAP $ (0.37) $ (0.28) $ (0.65)
  • 24.
    24 © 2017 Nutanix,Inc. All rights reserved. Nutanix and the Nutanix logo are trademarks of Nutanix, Inc., registered in the United States and other countries.