back to article Nutanix makes thundering great loss, stock market hardly blinks

A thundering great loss: that’s the first thing to notice about Nutanix’s latest quarterly results. It’s more than three times worse than the loss of the previous quarter: $162.2m vs $49.9m and the year-ago quarter’s $38.5m loss; sales grew only 19 per cent sequentially so the rate of loss-making would seem to have accelerated …

  1. Pirate Dave
    Pirate

    So

    is Nutanix considered a safe-bet for end users? I ask because we're looking to buy some of their gear next summer when we (finally) start moving some things (mostly computer labs and other public-use computers) to VDI. I'm not a stock-market guru, but, eh, it seems strange to want to give a hundred thousand bucks of my meager IT budget to a company that lost $162 million in 3 months.

    1. Anonymous Coward
      Anonymous Coward

      Re: So

      Pirate Dave, I suggest see how things look in 6 months. A company should not be judged on 1 quarters figures but the hyped hyper-converged market seems likely to see a lot of change in the 6, 12 and even 24 month time frames. Gartner (trust them or not) are predicting that there will be massive changes in that market and 80% of current players will have gone by end of 2018. Some of their 'experts' love Nutanix, others less so. I think while Nutanix is a disruptive technology it will get all sorts of disruption itself. I don't think they will be the next Violin but they equally probably won't be the next VMware as they seem to project themselves as.

      1. Nate Amsden Silver badge

        Re: So

        judging a company on one quarter's numbers? The graph is right there in the article. It reminds me a lot of Violin's graph, here is an article from 2013 about them

        http://www.theregister.co.uk/2013/11/25/mistuned_strings_on_violin_cause_financial_discord/

        heat is on to keep the growth going.

        I think if anyone is buying into VDI right now it is probably safe that Nutanix will be around in 3-4 years even if they are in the toilet at that point(see how violin continues to hang on by a thread).

      2. Pirate Dave
        Pirate

        Re: So

        I agree, AC, but like Nate posted, the whole chart for Nutanix is there, and every quarter has been a loss for them so far. So I feel kind of funny telling my VP that I want to buy $100k worth of equipment from them. Unless their stuff is like super good, stable as a rock, and can be managed over lunch hour by an intern...

        I guess I could roll my own with HP, VMWare and Citrix, but, mmph, that's a lot of work (and reading. Oh, and probably money, too). But at least I'm relatively sure all three will be around in 5 years. I do tend to run things until the bearings wear out around here, so I'm not much for the "here today, gone tomorrow" companies if I can avoid it.

        But I do appreciate the input so far.

        1. Marketing Hack Silver badge

          Re: So

          And even ignoring their last, horrendous quarter, for the past 4-6 quarters their losses have been growing almost as rapidly as their revenues have. Doesn't look promising to me, barring some spending cutbacks or improvements in their processes and business model.

          1. Anonymous Coward
            Anonymous Coward

            Re: So

            From the quotes I see Nutanix is way more expensive than Dell/EMC and Cisco. And with those two I get some real hardware, not some flimsy Supermicro chassis that can barely handle the power consumption. I am wondering how they'll stay alive when the competition is better and cheaper.

        2. Lost_Signal

          Re: So

          Dave, note that Horizion view advanced includes VSAN for free. VSAN for desktops is the SKU for Citrix if you go down that path. I've built some VSAN/VDI clusters and it never took me more than a few days all in (rack, stack, build cluster, build VDI templates, setup VDI, create GPOs etc). Realistically this is all something some good PSO can take care of..

    2. Networking Dude

      Re: So

      The real magic of Nutanix is their software, pure and simple. If risk is on your plate, you can get the Nutanix software on a Dell/EMC platform also. Best software for hyperconverged infrastructure on a top 3 vendor for hardware and service. Easier sell to your C-Suite and could make your justification thesis a bit more elegant for them. And no, I do not work for Dell...The Nutanix hardware is sourced from SuperMicro so there is really no special things about it to justify it

      1. Anonymous Coward
        Anonymous Coward

        Re: So

        If I put Nutanix software on Dell, HP, or Cisco the price is so ridiculously high that I can get TWO times the specs using blades and any type of all flash array in way higher capacity and IOPS than what this solution could ever provide. I looked at Nutanix and frankly it is neither super performing nor that feature rich. Yes, they are good at simplifying things but once you pull back the curtain it's really not that impressive. I'll take some HP blades and a Nimble array for half the price and way easier scalability.

        Look, the whole point of Nutanix was that SAN is so complex and hard to scale. My Pure and Nimble arrays are so easy to manage, it's a joke. I can scale any way I want and I get real predictability and application performance insight.

        But what really pissed me off were their over-the-top claims. Their new DR to cloud software or however they call it. Man, the engineer and sales rep were claiming it's like a one-click failover for my entire environment. When in reality it's a haphazard Veeam knockoff with 5% of the features. I have the nagging suspicion that's across their entire feature set.

  2. O RLY

    My bullshit to English dictionary seems to be misplaced

    What the fuck does this mean: "The time warp between an enterprise-friendly VMware and a consumer-friendly AWS is our cloud opportunity. Our first quarter results are reflective of the strength of our thesis on how enterprise computing will morph in the coming three to five years."

    Is a "time warp" a place? Are accounting rules different there, whereby spending 2x revenue equals strength?

  3. Andy The Hat Silver badge

    I don't understand ...

    Investment to build the company resulting in expenditure (debt) I do understand.

    But how can increased revenues and a larger customer base, yet an obvious trend to eat cash with accelerating losses per customer, be regarded as good? There must be something else about this the market likes apart from the balance sheet ...

    1. Anonymous Coward
      Anonymous Coward

      Re: I don't understand ...

      They are taking a page out of the Palo Alto Networks book. Keep spending and growing and no one will care about profits... But that only works so long... If you cannot build your business to sustain profitability as a public company, you should not be a public company..

  4. Anonymous Coward
    Anonymous Coward

    For a vmware shop, look at vsan, for a microsoft shop, look at storage spaces, azure stack etc. I only see a small potential for nutanix in the kvm space, but that's about it, unless you can geta great kvm deal from red hat.

  5. jimmyPx

    Doesn't this sound like press releases from the .com boom 15 years ago ??

    Don't worry about losses--our revenue is up !! Losses don't matter until you run out of cash and VCs willing to pump money into your company then say hello to bankruptcy.

    1. Ole Juul Silver badge

      When bankruptcy happens, the VCs get their money back because it's protected. It's all the common shareholders who get hosed.

  6. Anonymous Coward
    Anonymous Coward

    Erm?

    "The time warp between an enterprise-friendly VMware and a consumer-friendly AWS is our cloud opportunity. Our first quarter results are reflective of the strength of our thesis on how enterprise computing will morph in the coming three to five years."

    What the fuck does that mean.

    I have a reasonable grasp of English, being English and all, but it looks like he ate a few pages of a dictionary then followed it up by a bag of salt and then read the jumbled up pile of words he subsequently puked on the road.

    Just plain language please.

  7. froberts2

    The Violin...

    Anyone hear the tiny violin playing in the background of their announcements...?

    Give it 12 months and Nutanix will be the Violin of the HCI market.

    1. Anonymous Coward
      Anonymous Coward

      Re: The Violin...

      The company paid back $75M and bought two companies in that quarter right? So most of the loss would be from one time items and not likely to reoccur in future quarters.. Also the company is operating cash flow positive, so is generating cash from operations. Unlike a lot of startups. At current burn rate the company has about 6 years of cash, assuming no further growth.. Somehow this doesn't sound like Violin at the moment.

  8. Michael Duke

    Also have a good look at the new DellEMC VXRail V Series nodes for VDI.

    In my admittedly biased opinion they are one of the better ways of deploying VDI.

  9. ManMountain1

    This market is changing very rapidly. I'd assess all the options at the point you're ready to spend the cash. Don't buy purely on a potentially flawed perception of what seems hot right now! You're right to be concerned ... the move from funky, aggressive start up to sustainable business is a tricky one in today's market and the losses curve shows no signs of heading even vaguely in the right direction right now.

  10. Anonymous Coward
    Anonymous Coward

    That is a pretty spectacular loss! To lose a $, for every $ you earn takes some doing! It currently costs them $2 to 'make' something that they sell for 1$! Hmmm.

    1. Anonymous Coward
      Anonymous Coward

      Browsing the list of comments here, it is clear that IT doesn't understand finance/business(despite years of the industry begging for it). Do any of the people here know how to read a balance sheet? The company generated cash from Operations. The company met and exceeded revenue targets, and raised their future expectations to the public market. The increase of "loss" included a one-time $75M loan payoff and they purchased 2 companies. These are not items that should concern a financially astute individual as they are easily explained. The one-time payback loan was just that. Nutanix went public and their cash increased during this same time by over $200M+. So, how can a company lose that much money in a quarter and their cash goes up? Study it IT professionals. If you ever want to be somebody in the industry - if you can look at Nutanix's numbers and truly understand them - then you'll have the ability to understand technology *and* business.

      I'll come out and say this. This stock is a fantastic long term buy. This software is head and shoulders above of all the chasers including (HPE, Cisco, EMC/Dell, and Simplivity). Take a look at it if you haven't.

      1. Anonymous Coward
        Anonymous Coward

        Great. now we have the Nutanix blowhards posting here.

        $40m loss in the previous quarters. The GS loan was $75m, how much was PernixData (which is a crap product btw, can anyone say write cache flush cascade? Also, all the engineering has left and Nutanix owns the IP and nothing else)? So pray tell, Nutanix marketing bot, where are the additional $45m coming from? That's $5m per day, dude

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