Shares of Nutanix (NASDAQ:NTNX) were climbing today after the hyperconverged infrastructure specialist posted impressive preliminary results for the third quarter.
The stock was up 18.5% as of 12:37 p.m. EDT on Wednesday.
Nutanix said it expects revenue for the third quarter, which ended April 30, to be between $312 million and $317 million, representing 8% to 10% growth, and better than the analyst consensus at $307.4 million.
Total revenue growth continues to be hurt by the company's transition to a subscription business and is expected to accelerate as hardware makes up a smaller percentage of its business. Management said total contract value (TCV) revenue would grow 16% to 17% to between $307 million and $312 million, in line with the company's prior guidance at $300 million to $320 million, while TCV billings would rise 14% to 16% to a range of $371 million to $376 million, also in line with guidance at $365 million to $385 million.
CEO Dheeraj Pandey said the company was well prepared for the shift that's ensuing from the pandemic:
Our business is taking important strides in digital prospecting, virtual selling, and remote work. A new company will emerge from this pandemic, and this quarter is just the beginning of that. The recessionary macro environment makes our subscription transformation and our delightful zero-touch products even more impactful, as we enable our customers to be resilient, prepared, and productive.
He also cited corporate initiatives like remote work, hands-free IT automation, and the hybrid cloud as areas where Nutanix will play a role.
Investors were clearly pleased that the company's performance had held up well in spite of the pandemic. But Nutanix nonetheless withdrew its guidance for the year and its business model targets for calendar 2020 due to the uncertainty around COVID-19's impact on customers and end markets. However, the company said it has thus far seen steady demand for its hybrid cloud solutions
We'll learn more when the company delivers the full report on May 27, but it's clearly a good sign that Nutanix is seeing steady demand for its products.