What happened

Stock in Nuxtanix Inc. (NASDAQ:NTNX), a provider of enterprise cloud networking services, rose 46.2% in the first six months of 2018, according to data from S&P Global Market Intelligence.

So what

Nutanix shares have benefited from the company's accelerated revenue growth in recent quarters. A positive earnings report released on March 1, covering the company's fiscal second quarter of 2018, was the primary catalyst for its ascent in the first half of the year: 

NTNX Chart

NTNX data by YCharts.

In the second quarter (the three months ended Jan. 31, 2018), revenue surged 44% over the prior-year quarter to $286.7 million, while billings expanded by 55% to $355.9 million. In addition, Nutanix more than doubled the number of $1-million-plus deals won during the period against the prior year, to 104 transactions.

Nutanix followed this performance with an equally strong showing in its fiscal third-quarter report, which was released May 24. During the third quarter, the company's top line gained 41% to $289.4 million, and billings continued to exhibit strength, rising 50%.

As I explained in a recap of third-quarter earnings, Nutanix is reaping the rewards of management's decision to decelerate sales of third-party partners' hardware products, in favor of focusing solely on the company's own cloud-based enterprise networking software. This shift has boosted profitability and operating cash flow. Gross margin improved by nearly 750 basis points in the third quarter to 67%, helping to propel operating cash flow in the first nine months of the fiscal year to $69.8 million, versus just $7.9 million in the third quarter of 2017.

Cloud computing concept: wall of computer-generated images stretching to infinity.

Image source: Getty Images.

Now what

Looking forward to the final quarter of the fiscal year, shareholders will anticipate continued double-digit gains in revenue and billings. In addition, investors will seek updates from management on the company's next generation of cloud-based products like Era, Beam, and Flow, three recently launched software offerings that handle database snapshots, cloud spend monitoring, and cloud application-based security, respectively.

These products are representative of Nutanix's software-only solutions approach, and each operates under the company's "one-click" philosophy of application simplicity. Nutanix is expected to report earnings next on Aug. 30. 

Asit Sharma has no position in any of the stocks mentioned. The Motley Fool recommends Nutanix. The Motley Fool has a disclosure policy.