Nutanix (NASDAQ:NTNX) has started making a comeback on the stock market in recent months, ever since investors got a hint of a turnaround in its fortunes following a terrific third-quarter earnings report. The cloud computing software specialist's recent moves have helped allay fears that the company's business could be in trouble because of competition from Cisco and Hewlett-Packard Enterprise.

Investors will be looking for confirmation that its turnaround is indeed on track when Nutanix releases its fiscal fourth-quarter results after the market closes on Aug. 31. Here's what investors will be looking for in the company's upcoming report.

Rendering of laptop comuters connected to a cloud.

Image source: Getty Images.

Rapid customer growth

Nutanix's guidance for fourth-quarter revenue and earnings were better than what Wall Street was expecting, so there won't be any surprise if it trumps expectations once again. But investors will be keeping a close watch on the company's customer growth and transaction size, as they are critical to its long-term growth.

Nutanix added 800 new customers in the third quarter. But more importantly, its focus on adding large-sized accounts helped it strike 34 deals that were worth $1 million or more. In addition, two of its deals were worth more than $5 million.

Not surprisingly, its selling and marketing expenses as a percentage of revenue had dropped to 58% of revenue in the third quarter as against 63% in the year-ago period.

Therefore, it will be important for Nutanix to once again strike bigger deals if it wants to move faster toward profitability, which, in turn, will once again boost investor confidence. The good news is that Nutanix has made some smart moves of late that could play a key role in continuing to improve its client portfolio.

Recent partnerships could be catalysts

Nutanix investors were brimming with confidence in late June, after the cloud-computing specialist announced a deal with Alphabet that will help its users migrate applications seamlessly to the Google Cloud Platform. Users of both platforms can now combine the two cloud-computing environments to launch and manage applications.

This will allow enterprise customers to switch seamlessly between their public and private cloud infrastructure. The attractive part about this partnership is that enterprise customers can start small and then scale up according to their infrastructure needs. This seamless convergence, known as hyper-converged infrastructure, enabled between Google's public cloud infrastructure and the enterprise customer's private cloud by Nutanix's solutions is another step toward attacking an opportunity that could be worth $8.5 billion by 2020.

More importantly, Nutanix's recent technology partnership with Aviatrix should help the company tap cloud service providers such as Microsoft's Azure, Amazon Web Services, and other public providers. The two companies have jointly developed a solution that will help enterprise customers automatically connect private and public cloud environments.

This solution was made available to customers in July, so it won't be surprising if it boosts Nutanix's customer base and helps the company issue a solid guidance once again. But more importantly, the solution can help Nutanix tap the growth opportunity in the hyper-converged cloud-computing space, as 18% of the chief information officers surveyed by the company plan to move to this platform over the next couple of years.

The bottom line

Investors can remain fairly confident of a good showing from Nutanix when it releases its fourth-quarter results. But the company's outlook should also be a bright one, given its recent moves to make the most of the fast-growing hyper-converged cloud infrastructure space that could help it land bigger deals and accelerate its move toward being profitable.

Therefore, it won't be surprising if Nutanix is able to sustain its recent turnaround, giving investors hope for more upside.

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