Shares in Nutanix jumped on fiscal first-quarter earnings and revenue that topped consensus estimates while guidance for NTNX stock came in above expectations.
Reported after the close on Wednesday, Nutanix earnings for the quarter ended Oct. 31 were 29 cents a share on an adjusted basis vs. 3 cents a year earlier. That topped estimates for an 18-cent adjusted profit.
The maker of cloud-computing network management software said revenue rose 18% to $511.1 million, ahead of views for $501 million.
For the current quarter ending in January, Nutanix predicted revenue of $550 million at the midpoint of guidance vs. estimates of $534 million.
On the stock market today, NTNX stock rose 3.7% to close at 43.09.
NTNX Stock: Key Metric Comes In Strong
Also giving a boost to Nutanix stock were fiscal Q1 contract renewals, which came in stronger than expected.
Annual contract value (ACV) billings came in at $287.2 million vs. estimates of $266.7 million. In fiscal Q2, Nutanix said it expects ACV billings of $300 million vs. estimates of $294 million.
"The strength in ACV billings and annual recurring revenue was driven by good execution in the new and expansion business, especially within the U.S. federal vertical," said JPMorgan analyst Pinjalim Bora in a report.
"Additionally, Nutanix announced its first customer win for GPT-in-a-Box, which is a turnkey generative AI solution build on top of the Nutanix platform that was launched only a few months ago."
Nutanix competes against Broadcom's VMware unit, Hewlett Packard Enterprise and Dell Technologies. The company recently announced a marketing partnership with Cisco Systems.
Nutanix shares are up 59% so far in 2023. NTNX stock trades well above a buy zone. The stock holds a Relative Strength Rating of 96 out of a best-possible 99, according to IBD Stock Checkup.
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