[March 01, 2018] |
|
Nutanix Reports Second Quarter Fiscal 2018 Financial Results
Nutanix,
Inc. (NASDAQ: NTNX),
a leader in enterprise cloud computing, today announced financial
results for its second quarter of fiscal year 2018, ended January 31,
2018.
This press release features multimedia. View the full release here:
http://www.businesswire.com/news/home/20180301006323/en/
Nutanix Q2 FY18 Highlights (Graphic: Business Wire)
Second Quarter Fiscal Year 2018 Financial Highlights
-
Revenue: $286.7 million, growing 44% year-over-year from $199.2
million in the second quarter of fiscal 2017, reflecting the
elimination of approximately $14 million in hardware revenue in the
quarter as the company executes its shift toward increasing software
revenue*
-
Billings: $355.9 million, growing 57% year-over-year from
$227.4 million in the second quarter of fiscal 2017
-
Gross Profit: GAAP gross profit of $178.2 million, up 46%
year-over-year from $122.4 million in the second quarter of fiscal
2017; Non-GAAP gross profit of $182.2 million, up 45% year-over-year
from $126.0 million in the second quarter of fiscal 2017
-
Net Loss: GAAP net loss of $62.6 million, compared to a GAAP
net loss of $76.4 million in the second quarter of fiscal 2017;
Non-GAAP net loss of $23.2 million, compared to a non-GAAP net loss of
$23.0 million in the second quarter of fiscal 2017
-
Net Loss Per Share: GAAP net loss per share of $0.39, compared
to a GAAP net loss per share of $0.54 in the second quarter of fiscal
2017; Non-GAAP net loss per share of $0.14, compared to a non-GAAP net
loss per share of $0.16 in the second quarter of fiscal 2017
-
Cash and Short-term Investments: $918.3 million, up 159% from
the second quarter of fiscal 2017 primarily as a result of $509
million in net proceeds from its 0% 5-year Convertible Senior Notes
issued in the quarter
-
Deferred Revenue: $478.0 million, up 57% from the second
quarter of fiscal 2017
-
Operating Cash Flow: $46.4 million, compared to $19.8 million
in the second quarter of fiscal 2017
-
Free Cash Flow: $32.4 million, compared to $7.1 million in the
second quarter of fiscal 2017
Reconciliations between GAAP and non-GAAP financial measures and key
performance measures are provided in the tables of this press release.
"We had an outstanding quarter that demonstrated our strong execution
across many business initiatives. Our shift toward a software-centric
strategy is on track and we aligned our sales compensation in February
to support this transition," said Dheeraj Pandey, Chairman, Founder and
CEO of Nutanix. "Our continued success with Global 2000 customers, the
strength of our large deal execution and record number of new customers
prove that we are reducing friction for our customers and providing them
with a consumer-grade experience that is unmatched."
"We are proud of our performance in Q2. During the quarter, we saw
record results across all geographies, with particularly strong
performances from our EMEA and APJ regions. Our 57% billings growth
year-over-year and our 45% increase in non-GAAP gross profit
year-over-year drove a better than expected bottom line," said Duston
Williams, CFO of Nutanix. "Our software and support billings also rose
significantly during the quarter, demonstrating our progress as we
transition to a software-centric business model. Our strong execution on
our strategic initiatives, together with our successful convertible debt
offering, put us in a strong position for the future."
Recent Company Highlights
-
Continued Customer Growth: Nutanix ended the second quarter of
fiscal 2018 with 8,870 end-customers, adding a record 1,057 new
end-customers during the quarter. Second quarter customer wins
included Arca Continental, DB Systel, JetBlue Airways, Multi Commodity
Exchange of India Limited (MCX), Nexen (a CNOOC Limited Company), and
Schroders
-
Accelerated Number of $1 Million+ Deals: 57 customers with
deals over $1 million in the quarter, up 104% year-over-year
-
Signed 5 Software and Support Deals Greater than $3 Million: Nutanix
signed five software and support deals worth more than $3 million, of
which three were worth more than $5 million during the quarter, all
with Global 2000 customers
-
Named a Leader in the Gartner Magic Quadrant for Hyperconverged
Infrastructure1: Nutanix believes its placement
in the Leaders quadrant is a strong validation of its leadership
in the market it pioneered and of its vision to become the
next-generation operating system for the enterprise cloud
-
Released Version 5.5: Featuring Calm automation and
orchestration, Nutanix released its version 5.5, the largest and most
comprehensive release in its history, with new features and
enhancements to the Nutanix Enterprise Cloud OS software
-
Issued $575 million Zero Coupon Convertible Senior Notes: The
company fortified its balance sheet with the issuance of $575 million
zero coupon convertible senior notes due in 2023, adding $509 million
in net proceeds to its cash and short-term investments during the
quarter
-
Signed Definitive Agreement to Acquire Minjar: Announced in a separate
release issued today that the company had signed a definitive
agreement to acquire Minjar and its Botmetric service, a cloud
technology solutions company helping enterprises embrace the cloud
effectively and optimize their multi-cloud environments for
performance and cost
-
Hired Industry Leaders in Key Roles: Further augmented the
leadership team with the addition of Aaron
Bean, Chief Human Resources Officer; Rodney
Foreman, VP, Global Channel Sales; Ben
Gibson, Chief Marketing Officer; Ricardo
Jenez, SVP, Development; and Chris
Kozup, SVP, Global Marketing
-
Plans Inaugural Investor Day: Nutanix will hold its first
investor day for analysts and institutional investors on Monday, March
12th at the Nasdaq Marketsite
Q3 Fiscal 2018 Financial Outlook
For the third quarter of fiscal 2018, Nutanix expects:
-
Revenues between $275 and $280 million; assuming the elimination of
approximately $45 million in pass-through hardware revenue*;
-
Non-GAAP gross margin between 67% and 68%;
-
Non-GAAP operating expenses between $218 and $220 million;
-
Non-GAAP net loss per share between $0.19 and $0.21, using 167 million
weighted shares outstanding.
*The elimination of hardware revenue is based on the estimated cost of
hardware in transactions where our customers purchase such hardware
directly from our contract manufacturers.
Supplementary materials to this earnings release, including the
company's second quarter fiscal 2018 investor presentation, can be found
at http://ir.nutanix.com/company/financial/.
1 Gartner does not endorse any vendor, product or service
depicted in its research publications, and does not advise technology
users to select only those vendors with the highest ratings or other
designation. Gartner research publications consist of the opinions of
Gartner's research organization and should not be construed as
statements of fact. Gartner disclaims all warranties, expressed or
implied, with respect to this research, including any warranties of
merchantability or fitness for a particular purpose.
All forward-looking non-GAAP financial measures contained in this
section titled "Q3 Fiscal 2018 Financial Outlook" exclude stock-based
compensation expense and amortization of intangible assets and may also
exclude, as applicable, other special items. The company has not
reconciled guidance for non-GAAP gross margin and non-GAAP loss per
share to their most directly comparable GAAP measures because such items
that impact these measures are not within its control and are subject to
constant change. While the actual amounts of such items will have a
significant impact on the company's non-GAAP gross margin and non-GAAP
loss per share, a reconciliation of the non-GAAP financial measure
guidance to the corresponding GAAP measures is not available without
unreasonable effort.
Webcast and Conference Call Information
Nutanix executives will discuss the company's fiscal second quarter
financial results on a conference call at 4:30 p.m. Eastern time/1:30
p.m. Pacific time today. To listen to the call via telephone, dial
1-833-227-5841 in the United States or 1-647-689-4068 from outside the
United States. The conference ID is 1984527. This call will be webcast
live and available to all interested parties on our Investor Relations
website at ir.nutanix.com.
Shortly after the conclusion of the conference call, a replay of the
audio webcast will be available on the Nutanix Investor Relations
website. A telephonic replay will be available for one week following
the conference call at 1-800-585-8367 or 1-416-621-4642, conference ID
1984527.
New Accounting Standard
The Company adopted ASC 606, the new standard related to revenue
recognition effective August 1, 2017. Prior period information has been
adjusted to reflect the adoption of this new standard.
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 profit, non-GAAP gross margin, non-GAAP operating
expenses, 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, amortization of debt discount and
debt issuance costs 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. Non-GAAP gross
profit, adjusted gross margin and non-GAAP operating expenses are
performance measures which our management believes provide useful
information to investors because they 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. 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. 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 profit,
non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss,
pro forma non-GAAP net loss per share, and free cash flow are not
substitutes for total revenue, gross profit, gross margin, operating
expenses, 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 Profit Measures," 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 press release contains express and implied forward-looking
statements, including but not limited to statements relating to our
competitive differentiation, our plans and expectations relating to
product sales and shifts in the mix of whether our solutions are sold as
an appliance or as software-only, our plans and expectations regarding
product features and technology that are under development or in
process, and capabilities of such product features and technology, the
impact of the Minjar acquisition to our business, our plans to introduce
product features in future releases, including the integration of
Botmetric into our offerings, and anticipated future financial results,
including but not limited to our guidance on estimated revenues,
non-GAAP gross margin, non-GAAP operating expenses and non-GAAP net loss
per share for future fiscal periods. 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: failure to develop, or unexpected difficulties or delays in
developing, new product features or technology on a timely or
cost-effective basis; delays in or lack of customer or market acceptance
of our new product features or technology; the failure of our software
to interoperate on different hardware platforms; delays in the formation
of new strategic partnerships and the possibility that we may not
receive anticipated results from forming such strategic partnerships;
our ability to successfully integrate acquired companies, employees and
intellectual property; delays in the transition to focus primarily on
software-only transactions; 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, anticipated
changes to our revenue and product mix which will slow revenue growth
during such transition and make forecasting future performance more
difficult, 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 in the pricing of certain
components of our solutions, and fluctuations in demand and competitive
pricing pressures for our solutions; 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, 2017, filed with the SEC on
December 13, 2017. Additional information will also be set forth in our
Form 10-Q that will be filed for the quarter ended January 31, 2018,
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 press
release and, except as required by law, we assume no obligation to
update forward-looking statements to reflect actual results or
subsequent events or circumstances.
About Nutanix
Nutanix is a global leader in cloud software and hyperconverged
infrastructure solutions, making infrastructure invisible so that IT can
focus on the applications and services that power their business.
Companies around the world use Nutanix Enterprise Cloud OS software to
bring one-click application management and mobility across public,
private and distributed edge clouds so they can run any application at
any scale with a dramatically lower total cost of ownership. The result
is organizations that can rapidly deliver a high-performance IT
environment on demand, giving application owners a true cloud-like
experience. Learn more at www.nutanix.com
or follow us on Twitter @nutanix.
© 2018 Nutanix, Inc. All rights reserved. Nutanix and the Nutanix logo
are registered trademarks or trademarks of Nutanix, Inc. in the United
States and other countries. All other brand names mentioned herein are
for identification purposes only and may be the trademarks of their
respective holder(s).
|
|
|
|
NUTANIX, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
As of
|
|
|
|
July 31,
|
|
|
January 31,
|
|
|
|
2017
|
|
|
2018
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
138,359
|
|
|
|
$
|
610,446
|
|
Short-term investments
|
|
|
210,694
|
|
|
|
307,809
|
|
Accounts receivable-net
|
|
|
178,876
|
|
|
|
179,241
|
|
Deferred commissions-current
|
|
|
23,843
|
|
|
|
33,508
|
|
Prepaid expenses and other current assets
|
|
|
28,362
|
|
|
|
31,547
|
|
Total current assets
|
|
|
580,134
|
|
|
|
1,162,551
|
|
Property and equipment-net
|
|
|
58,072
|
|
|
|
69,074
|
|
Deferred commissions-non-current
|
|
|
49,684
|
|
|
|
66,120
|
|
Intangible assets-net
|
|
|
26,001
|
|
|
|
23,539
|
|
Goodwill
|
|
|
16,672
|
|
|
|
16,672
|
|
Other assets-non-current
|
|
|
7,649
|
|
|
|
7,240
|
|
Total assets
|
|
|
$
|
738,212
|
|
|
|
$
|
1,345,196
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
73,725
|
|
|
|
$
|
56,270
|
|
Accrued compensation and benefits
|
|
|
57,521
|
|
|
|
75,310
|
|
Accrued expenses and other current liabilities
|
|
|
9,707
|
|
|
|
11,241
|
|
Deferred revenue-current
|
|
|
170,123
|
|
|
|
231,731
|
|
Total current liabilities
|
|
|
311,076
|
|
|
|
374,552
|
|
Deferred revenue-non-current
|
|
|
198,933
|
|
|
|
246,269
|
|
Convertible senior notes-net
|
|
|
-
|
|
|
|
415,651
|
|
Early exercised stock options liability
|
|
|
851
|
|
|
|
430
|
|
Other liabilities-non-current
|
|
|
10,289
|
|
|
|
7,815
|
|
Total liabilities
|
|
|
521,149
|
|
|
|
1,044,717
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock
|
|
|
4
|
|
|
|
4
|
|
Additional paid-in capital
|
|
|
948,134
|
|
|
|
1,156,282
|
|
Accumulated other comprehensive loss
|
|
|
(106
|
)
|
|
|
(720
|
)
|
Accumulated deficit
|
|
|
(730,969
|
)
|
|
|
(855,087
|
)
|
Total stockholders' equity
|
|
|
217,063
|
|
|
|
300,479
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
738,212
|
|
|
|
$
|
1,345,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUTANIX, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except share and per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
January 31,
|
|
|
January 31,
|
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
|
$
|
158,213
|
|
|
|
$
|
223,170
|
|
|
|
$
|
311,749
|
|
|
|
$
|
442,222
|
|
Support and other services
|
|
|
41,001
|
|
|
|
63,574
|
|
|
|
76,026
|
|
|
|
120,074
|
|
Total revenue
|
|
|
199,214
|
|
|
|
286,744
|
|
|
|
387,775
|
|
|
|
562,296
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Product (1)(2)
|
|
|
58,403
|
|
|
|
83,217
|
|
|
|
110,613
|
|
|
|
168,379
|
|
Support and other services (1)
|
|
|
18,443
|
|
|
|
25,311
|
|
|
|
35,995
|
|
|
|
48,771
|
|
Total cost of revenue
|
|
|
76,846
|
|
|
|
108,528
|
|
|
|
146,608
|
|
|
|
217,150
|
|
Gross profit
|
|
|
122,368
|
|
|
|
178,216
|
|
|
|
241,167
|
|
|
|
345,146
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing (1)(2)
|
|
|
111,374
|
|
|
|
151,201
|
|
|
|
239,999
|
|
|
|
296,606
|
|
Research and development (1)
|
|
|
70,914
|
|
|
|
70,924
|
|
|
|
146,195
|
|
|
|
135,436
|
|
General and administrative (1)
|
|
|
15,481
|
|
|
|
15,948
|
|
|
|
44,853
|
|
|
|
32,000
|
|
Total operating expenses
|
|
|
197,769
|
|
|
|
238,073
|
|
|
|
431,047
|
|
|
|
464,042
|
|
Loss from operations
|
|
|
(75,401
|
)
|
|
|
(59,857
|
)
|
|
|
(189,880
|
)
|
|
|
(118,896
|
)
|
Other expense-net
|
|
|
(421
|
)
|
|
|
(861
|
)
|
|
|
(26,133
|
)
|
|
|
(1,050
|
)
|
Loss before provision for income taxes
|
|
|
(75,822
|
)
|
|
|
(60,718
|
)
|
|
|
(216,013
|
)
|
|
|
(119,946
|
)
|
Provision for income taxes
|
|
|
547
|
|
|
|
1,913
|
|
|
|
658
|
|
|
|
4,172
|
|
Net loss
|
|
|
$
|
(76,369
|
)
|
|
|
$
|
(62,631
|
)
|
|
|
$
|
(216,671
|
)
|
|
|
$
|
(124,118
|
)
|
Net loss per share attributable to Class A and Class B common
stockholders-basic and diluted
|
|
|
$
|
(0.54
|
)
|
|
|
$
|
(0.39
|
)
|
|
|
$
|
(2.00
|
)
|
|
|
$
|
(0.78
|
)
|
Weighted-average shares used in computing net loss per share
attributable to Class A and Class B common stockholders-basic and
diluted
|
|
|
141,996,600
|
|
|
|
161,737,428
|
|
|
|
108,185,194
|
|
|
|
159,251,964
|
|
(1) Includes the following stock-based compensation expense:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
January 31,
|
|
|
January 31,
|
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
|
(in thousands)
|
Product cost of sales
|
|
|
$
|
848
|
|
|
|
$
|
684
|
|
|
|
$
|
1,814
|
|
|
|
$
|
1,254
|
Support cost of sales
|
|
|
2,389
|
|
|
|
2,133
|
|
|
|
5,739
|
|
|
|
4,205
|
Sales and marketing
|
|
|
15,528
|
|
|
|
15,942
|
|
|
|
49,419
|
|
|
|
29,708
|
Research and development
|
|
|
28,759
|
|
|
|
17,023
|
|
|
|
62,785
|
|
|
|
32,565
|
General and administrative
|
|
|
5,083
|
|
|
|
6,229
|
|
|
|
23,578
|
|
|
|
9,794
|
Total stock-based compensation expense
|
|
|
$
|
52,607
|
|
|
|
$
|
42,011
|
|
|
|
$
|
143,335
|
|
|
|
$
|
77,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Includes the following amortization of intangible assets:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
January 31,
|
|
|
January 31,
|
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
|
(in thousands)
|
Product cost of sales
|
|
|
$
|
360
|
|
|
|
$
|
1,164
|
|
|
|
$
|
598
|
|
|
|
$
|
2,059
|
Sales and marketing
|
|
|
248
|
|
|
|
192
|
|
|
|
415
|
|
|
|
403
|
Total amortization of intangible assets
|
|
|
$
|
608
|
|
|
|
$
|
1,356
|
|
|
|
$
|
1,013
|
|
|
|
$
|
2,462
|
|
|
|
|
NUTANIX, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
January 31,
|
|
|
|
2017
|
|
|
2018
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(216,671
|
)
|
|
|
$
|
(124,118
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
18,172
|
|
|
|
23,015
|
|
Stock-based compensation
|
|
|
143,335
|
|
|
|
77,526
|
|
Loss on debt extinguishment
|
|
|
3,320
|
|
|
|
-
|
|
Change in fair value of convertible preferred stock warrant liability
|
|
|
21,133
|
|
|
|
-
|
|
Change in fair value of contingent consideration
|
|
|
472
|
|
|
|
(3,955
|
)
|
Amortization of debt discount and issuance cost
|
|
|
-
|
|
|
|
738
|
|
Other
|
|
|
457
|
|
|
|
141
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable-net
|
|
|
(39,730
|
)
|
|
|
(490
|
)
|
Deferred commission
|
|
|
(8,071
|
)
|
|
|
(26,101
|
)
|
Prepaid expenses and other assets
|
|
|
(2,707
|
)
|
|
|
(2,842
|
)
|
Accounts payable
|
|
|
11,342
|
|
|
|
(16,560
|
)
|
Accrued compensation and benefits
|
|
|
11,811
|
|
|
|
17,789
|
|
Accrued expenses and other liabilities
|
|
|
1,677
|
|
|
|
2,415
|
|
Deferred revenue
|
|
|
79,372
|
|
|
|
108,944
|
|
Net cash provided by operating activities
|
|
|
23,912
|
|
|
|
56,502
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(24,616
|
)
|
|
|
(31,993
|
)
|
Purchases of investments
|
|
|
(117,550
|
)
|
|
|
(183,102
|
)
|
Maturities of investments
|
|
|
41,200
|
|
|
|
84,927
|
|
Sale of investments
|
|
|
32,640
|
|
|
|
-
|
|
Payments for business acquisitions, net of cash acquired
|
|
|
(184
|
)
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
(68,510
|
)
|
|
|
(130,168
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from issuance of convertible senior notes-net
|
|
|
-
|
|
|
|
564,219
|
|
Proceeds from issuance of warrants
|
|
|
-
|
|
|
|
87,975
|
|
Payments for the cost of convertible note hedges
|
|
|
-
|
|
|
|
(143,175
|
)
|
Proceeds from initial public offering, net of underwriting discounts
and commissions
|
|
|
254,455
|
|
|
|
-
|
|
Proceeds from sales of shares through employee equity incentive
plans, net of repurchases
|
|
|
2,180
|
|
|
|
36,819
|
|
Repayment of senior notes
|
|
|
(75,000
|
)
|
|
|
-
|
|
Debt extinguishment costs
|
|
|
(1,580
|
)
|
|
|
-
|
|
Payments of offering costs
|
|
|
(1,609
|
)
|
|
|
(85
|
)
|
Payment of debt in conjunction with a business acquisition
|
|
|
(7,124
|
)
|
|
|
-
|
|
Other
|
|
|
73
|
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
171,395
|
|
|
|
545,753
|
|
Net increase in cash and cash equivalents
|
|
|
126,797
|
|
|
|
472,087
|
|
Cash and cash equivalents-beginning of period
|
|
|
99,209
|
|
|
|
138,359
|
|
Cash and cash equivalents-end of period
|
|
|
$
|
226,006
|
|
|
|
$
|
610,446
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
Cash paid for income taxes
|
|
|
$
|
2,344
|
|
|
|
$
|
4,077
|
|
Cash paid for interest
|
|
|
$
|
1,271
|
|
|
|
$
|
-
|
|
Supplemental disclosures of non-cash investing and financing
information:
|
|
|
|
|
|
|
Purchases of property and equipment included in accounts payable
|
|
|
$
|
6,983
|
|
|
|
$
|
4,673
|
|
Vesting of early exercised stock options
|
|
|
$
|
920
|
|
|
|
$
|
435
|
|
Convertible notes issuance costs included in accounts payable and
accrued liabilities
|
|
|
$
|
-
|
|
|
|
$
|
707
|
|
Offering costs included in accounts payable
|
|
|
$
|
51
|
|
|
|
$
|
-
|
|
Conversion of convertible preferred stock to common stock, net of
issuance costs
|
|
|
$
|
310,379
|
|
|
|
$
|
-
|
|
Reclassification of convertible preferred stock warrant liability to
additional paid-in capital
|
|
|
$
|
30,812
|
|
|
|
$
|
-
|
|
Issuance of common stock for business acquisitions
|
|
|
$
|
27,063
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Revenue to Billings
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
January 31,
|
|
|
January 31,
|
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
Total revenue
|
|
|
$
|
199,214
|
|
|
|
$
|
286,744
|
|
|
|
$
|
387,775
|
|
|
|
$
|
562,296
|
Change in deferred revenue, net of acquisitions (1)
|
|
|
28,166
|
|
|
|
69,156
|
|
|
|
79,372
|
|
|
|
108,944
|
Billings
|
|
|
$
|
227,380
|
|
|
|
$
|
355,900
|
|
|
|
$
|
467,147
|
|
|
|
$
|
671,240
|
(1) Six months ended January 31, 2017 excluded approximately $6.0
million of deferred revenue assumed in the PernixData acquisition.
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Profit Measures
|
(In thousands, except share and per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
Non-GAAP Adjustments
|
|
|
Non-GAAP
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
|
January 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
2018
|
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
(6)
|
|
|
2018
|
Gross profit
|
|
|
$
|
178,216
|
|
|
|
$
|
2,817
|
|
|
$
|
1,164
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
182,197
|
|
Gross margin
|
|
|
62.1
|
%
|
|
|
1.0
|
%
|
|
0.4
|
%
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
63.5
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
151,201
|
|
|
(15,942
|
)
|
|
(192
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
135,067
|
|
Research and development
|
|
|
70,924
|
|
|
(17,023
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
53,901
|
|
General and administrative
|
|
|
15,948
|
|
|
(6,229
|
)
|
|
-
|
|
|
4,237
|
|
|
-
|
|
|
(528
|
)
|
|
-
|
|
|
|
13,428
|
|
Total operating expenses
|
|
|
238,073
|
|
|
|
(39,194
|
)
|
|
(192
|
)
|
|
4,237
|
|
|
-
|
|
|
(528
|
)
|
|
-
|
|
|
|
202,396
|
|
Loss from operations
|
|
|
(59,857
|
)
|
|
|
42,011
|
|
|
1,356
|
|
|
(4,237
|
)
|
|
-
|
|
|
528
|
|
|
-
|
|
|
|
(20,199
|
)
|
Net loss
|
|
|
$
|
(62,631
|
)
|
|
|
$
|
42,011
|
|
|
$
|
1,356
|
|
|
$
|
(4,237
|
)
|
|
$
|
738
|
|
|
$
|
528
|
|
|
$
|
(940
|
)
|
|
|
$
|
(23,175
|
)
|
Weighted-shares outstanding, basic and diluted
|
|
|
161,737,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
161,737,428
|
|
Net loss per share, basic and diluted
|
|
|
$
|
(0.39
|
)
|
|
|
$
|
0.26
|
|
|
$
|
0.01
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
(0.14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Stock-based compensation expense
|
(2) Amortization of intangible assets
|
(3) Change in fair value of contingent consideration assumed in the
PernixData acquisition
|
(4) Amortization of debt discount and debt issuance costs
|
(5) Acquisition-related costs
|
(6) Income tax effect primarily related to stock-based compensation
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
Non-GAAP Adjustments
|
|
|
Non-GAAP
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
|
January 31,
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
2017
|
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
|
2017
|
Gross profit
|
|
|
$
|
122,368
|
|
|
|
$
|
3,237
|
|
|
$
|
360
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
125,965
|
|
Gross margin
|
|
|
61.4
|
%
|
|
|
1.6
|
%
|
|
0.2
|
%
|
|
-
|
|
|
-
|
|
|
|
63.2
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
111,374
|
|
|
|
(15,528
|
)
|
|
(248
|
)
|
|
-
|
|
|
-
|
|
|
|
95,598
|
|
Research and development
|
|
|
70,914
|
|
|
|
(28,759
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
42,155
|
|
General and administrative
|
|
|
15,481
|
|
|
|
(5,083
|
)
|
|
-
|
|
|
(286
|
)
|
|
-
|
|
|
|
10,112
|
|
Total operating expenses
|
|
|
197,769
|
|
|
|
(49,370
|
)
|
|
(248
|
)
|
|
(286
|
)
|
|
-
|
|
|
|
147,865
|
|
Loss from operations
|
|
|
(75,401
|
)
|
|
|
52,607
|
|
|
608
|
|
|
286
|
|
|
-
|
|
|
|
(21,900
|
)
|
Net loss
|
|
|
$
|
(76,369
|
)
|
|
|
$
|
52,607
|
|
|
$
|
608
|
|
|
$
|
286
|
|
|
$
|
(172
|
)
|
|
|
$
|
(23,040
|
)
|
Weighted-shares outstanding, basic and diluted
|
|
|
141,996,600
|
|
|
|
|
|
|
|
|
|
|
|
|
141,996,600
|
|
Net loss per share, basic and diluted
|
|
|
$
|
(0.54
|
)
|
|
|
$
|
0.37
|
|
|
$
|
0.01
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Stock-based compensation expense
|
(2) Amortization of intangible assets
|
(3) Change in fair value of contingent consideration assumed in the
PernixData acquisition
|
(4) Income tax effect primarily related to stock-based compensation
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
Non-GAAP Adjustments
|
|
|
Non-GAAP
|
|
|
|
Six Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
|
January 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
2018
|
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
(6)
|
|
|
2018
|
Gross profit
|
|
|
$
|
345,146
|
|
|
|
$
|
5,459
|
|
|
$
|
2,059
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
352,664
|
|
Gross margin
|
|
|
61.4
|
%
|
|
|
1.0
|
%
|
|
0.3
|
%
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
62.7
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
296,606
|
|
|
(29,708
|
)
|
|
(403
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
266,495
|
|
Research and development
|
|
|
135,436
|
|
|
(32,565
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
102,871
|
|
General and administrative
|
|
|
32,000
|
|
|
(9,794
|
)
|
|
-
|
|
|
3,955
|
|
|
-
|
|
|
(528
|
)
|
|
-
|
|
|
|
25,633
|
|
Total operating expenses
|
|
|
464,042
|
|
|
|
(72,067
|
)
|
|
(403
|
)
|
|
3,955
|
|
|
-
|
|
|
(528
|
)
|
|
-
|
|
|
|
394,999
|
|
Loss from operations
|
|
|
(118,896
|
)
|
|
|
77,526
|
|
|
2,462
|
|
|
(3,955
|
)
|
|
-
|
|
|
528
|
|
|
-
|
|
|
|
(42,335
|
)
|
Net loss
|
|
|
$
|
(124,118
|
)
|
|
|
$
|
77,526
|
|
|
$
|
2,462
|
|
|
$
|
(3,955
|
)
|
|
$
|
738
|
|
|
$
|
528
|
|
|
$
|
(1,072
|
)
|
|
|
$
|
(47,891
|
)
|
Weighted-shares outstanding, basic and diluted
|
|
|
159,251,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
159,251,964
|
|
Net loss per share, basic and diluted
|
|
|
$
|
(0.78
|
)
|
|
|
$
|
0.49
|
|
|
$
|
0.02
|
|
|
$
|
(0.02
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
(0.30
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Stock-based compensation expense
|
(2) Amortization of intangible assets
|
(3) Change in fair value of contingent consideration assumed in the
PernixData acquisition
|
(4) Amortization of debt discount and debt issuance costs
|
(5) Acquisition-related costs
|
(6) Income tax effect primarily related to stock-based compensation
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
Non-GAAP Adjustments
|
|
|
Non-GAAP
|
|
|
|
Six Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
|
January 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
2017
|
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
(6)
|
|
(7)
|
|
|
2017
|
Gross profit
|
|
|
$
|
241,167
|
|
|
|
$
|
7,553
|
|
|
$
|
598
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
249,318
|
|
Gross margin
|
|
|
62.2
|
%
|
|
|
1.9
|
%
|
|
0.2
|
%
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
64.3
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
239,999
|
|
|
|
(49,419
|
)
|
|
(415
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
190,165
|
|
Research and development
|
|
|
146,195
|
|
|
|
(62,785
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
83,410
|
|
General and administrative
|
|
|
44,853
|
|
|
|
(23,578
|
)
|
|
-
|
|
|
(672
|
)
|
|
(472
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
20,131
|
|
Total operating expenses
|
|
|
431,047
|
|
|
|
(135,782
|
)
|
|
(415
|
)
|
|
(672
|
)
|
|
(472
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
293,706
|
|
Loss from operations
|
|
|
(189,880
|
)
|
|
|
143,335
|
|
|
1,013
|
|
|
672
|
|
|
472
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
(44,388
|
)
|
Net loss
|
|
|
$
|
(216,671
|
)
|
|
|
$
|
143,335
|
|
|
$
|
1,013
|
|
|
$
|
672
|
|
|
$
|
472
|
|
|
$
|
21,133
|
|
|
$
|
3,320
|
|
|
$
|
(2,281
|
)
|
|
|
$
|
(49,007
|
)
|
Weighted-shares outstanding, basic and diluted
|
|
|
108,185,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108,185,194
|
|
Pro forma adjustment
|
|
|
26,960,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,960,697
|
|
Pro forma weighted-shares outstanding, basic and diluted
|
|
|
135,145,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
135,145,891
|
|
Net loss per share, basic and diluted
|
|
|
$
|
(2.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net loss per share, basic and diluted *
|
|
|
$
|
(1.60
|
)
|
|
|
$
|
1.06
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
-
|
|
|
$
|
0.16
|
|
|
$
|
0.02
|
|
|
$
|
(0.02
|
)
|
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Stock-based compensation expense
|
(2) Amortization of intangible assets
|
(3) Acquisition-related costs
|
(4) Change in fair value of contingent consideration assumed in the
PernixData acquisition
|
(5) Change in fair value of preferred stock warrant liability
|
(6) Loss on debt extinguishment
|
(7) Partial release of valuation allowance from the PernixData
acquisition and the tax effect of stock-based compensation expense
|
*Pro forma non-GAAP basic and diluted net loss per share was
computed to give effect to the conversion of all outstanding
convertible preferred stock upon closing of our initial public
offering on October 5, 2016, as if the conversion had occurred at
the beginning of the period.
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Cash Provided By Operating Activities
to Non-GAAP Free Cash Flow
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
January 31,
|
|
|
January 31,
|
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
Net cash provided by operating activities
|
|
|
$
|
19,752
|
|
|
|
$
|
46,395
|
|
|
|
$
|
23,912
|
|
|
|
$
|
56,502
|
|
Purchase of property and equipment
|
|
|
(12,701
|
)
|
|
|
(14,028
|
)
|
|
|
(24,616
|
)
|
|
|
(31,993
|
)
|
Free cash flow
|
|
|
$
|
7,051
|
|
|
|
$
|
32,367
|
|
|
|
$
|
(704
|
)
|
|
|
$
|
24,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180301006323/en/
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