Partners Help Drive Strong Q1 Nutanix Revenue Growth

Nutanix on Tuesday reported strong revenue and profit growth for the first quarter of its fiscal year 2025, with much of it driven by Nutanix partners.

For the quarter ending Oct. 31, revenue totaled $591 million, up 16% from $511.1 million for the year-ago quarter. Annual recurring revenue (ARR) totaled $1.97 billion, up 18% from $1.66 billion.

For the quarter, Nutanix reported  $29.9 million in profit, compared to a $15.85 million loss for the year-ago quarter.

Nutanix Partners Bringing New Customers

Rajiv Ramaswami, Nutanix’s president and CEO, said his company exceeded its earnings guidance for the quarter and raised its second-quarter guidance. He also said the company saw an uptick in new customers during the quarter.

“New [customers] is an important vector for future growth because typically we land a new [customer] and then over time we get expansion business from those customers once they come in with us,” he said.

And indirect sales is playing significant a significant role.

“From a channel perspective, the channel is contributing to new [customers]. Last year, we took a segment of our customer base and handed it off 100% to the channel to prosecute, and we gave them additional incentives to bring us customers. So the channel partners get rewarded for bringing us new [customers]" Ramaswami said. "They may not be new [customers] to them, but if they're new [customers] to us, so they do get external additional rewards. Some of those are starting to come into play now, and we're seeing the effect of some of the changes that we made some time ago. These things take time. You put something in place and it takes a few months for it to get going, and now I think we're starting to see some of the results.”

Related:Nutanix Reveals Trio of Channel Leadership Promotions

First-Quarter Highlights

Among first-quarter highlights, Nutanix expanded its strategic collaboration with AWS that will offer access to AWS services for customers looking to migrate to NC2 on AWS. In addition, Nutanix extended its AI platform to public cloud.

“As far as we are concerned, our business goes through partners, so when we look at our offerings such as GPT-in-a-Box, which by the way we released version 2.0 of it last quarter, that's essentially the full Nutanix cloud platform, plus a component that we call Nutanix Enterprise AI,” Ramaswami said. “That Nutanix Enterprise AI is available as part of the on-premises platform, but also available standalone on top of public clouds. All of these get taken by channel partners to the market so they can benefit. And I would highly encourage our channel partners to get familiar with how to transact and sell the value proposition of Enterprise AI for these customers who are looking to deploy smaller-scale clusters for inferencing at their data centers, at their edges, for a whole range of applications, ranging from search and analysis, customer support, fraud detection, etc., and of course, developer productivity improvements, etc.”

For its second quarter, Nutanix expends $635 million to $645 in revenue. For the full year, it expects $2.44 billion to $2.47 billion in revenue.

“We have a new administration coming and we don't know what that could mean for us in terms of what their policies are,” Ramaswami said. “So there's certainly a level of uncertainty that, depending on what the new administration does, it may be positive, it may not be positive. We don't know, it's hard to speculate for us.”