Nutanix Poised to Break the Great Tech IPO Freeze of 2016

Hyperconverged infrastructure (HCI) provider Nutanix updated its paperwork with the United States Securities and Exchange Commission (SEC) on Monday, signaling the company may once more be moving forward with plans for an initial public offering (IPO). According to the filing, Nutanix, a leader in the still relatively small pack of players in the startup HCI market, nearly doubled its revenue in the six-month period ending January 31.

Nutanix filed for an IPO in December of last year, but volatility in the stock market reportedly caused them to delay. The tech IPO market has been completely frozen in 2016, the first time in seven years no American tech company has gone public, according to data from UK-based financial software company Dealogic. With this development, Nutanix is now in a neck-and-neck race with Dell cybersecurity firm SecureWorks to be the first tech IPO of the year.

The filing shows persuasive evidence that the company is in a good financial position to proceed with its IPO, having posted quarterly revenue of over $100 million for the first time. This brings total revenue to $190 million, up 85 percent year over year, with 100 percent of its sales conducted through the channel. The filing also reported 494 new customers added during the quarter ending January 31, bringing its total customer base to 2,638, an increase of nearly 19 percent.

Hyperconverged infrastructure refers to data center software that wraps together compute, storage, servers and virtualization. The tech resembles the web-based architecture of giant cloud companies such as Google, Facebook and Amazon but is geared toward enterprise applications. Recent data from IDC shows strong growth in the hyperconverged systems market, with global spending up 170.5 percent year over year to $355.9 million in the fourth quarter of 2015. 

The filing also detailed that Chairman and CEO Dheeraj Pandey voluntarily forfeited his rights to 1.3 million shares of restricted stock last month, which equates to approximately $17.5 million worth at the July 2015 stock price of $13.49. Returning this stock to the equity pool would allow Nutanix to redistribute shares to employees without diluting existing stakeholders by creating additional shares and help ensure a strong position as it enters a public offering.