According to a recent report, the enterprise cloud computing market is expected to grow 18% annually over the next few years to reach $1.25 trillion by 2027 from $545.8 billion in 2021. Nutanix (Nasdaq: NTNX), recently announced its first-quarter results that outpaced market expectations.

Nutanix’s Financials

For the first quarter of the year, revenues grew 15% to $433.6 million. ACV billings grew 27% to $231.9 million. Net loss per share was $0.43. The market was looking for revenues of $413.06 million and a loss of $0.12 per share.

By segment, Nutanix’s Product revenues grew to $208.57 million from $180.1 million a year ago. Revenues from support, entitlements, and other services grew from $198.4 million to $225 million.

For the current quarter, Nutanix forecast revenues of $460-$470 million compared with the market’s estimates of $449.11 million in revenue and an EPS of $0.09. For the fiscal year, it forecast revenues of $1.77-$1.78 billion compared with the market’s estimates of $1.78 billion in revenue and an EPS of $0.13.

Nutanix’s Cloud Expansion

Nutanix recently announced new features in its Cloud Platform to accelerate the adoption of Kubernetes running both at scale and cost-effectively. It announced support for leading Kubernetes container platforms, built-in infrastructure-as-code capabilities, and enhanced data services for modern applications. These new features will enable DevOps teams to accelerate application delivery.

According to a Gartner report, nearly a quarter of all enterprise applications will run in containers by 2027. Till 2021, that metric stood at 10% of enterprises. But despite the growth, most Kubernetes solutions are not currently designed to support enterprise scale.

The Nutanix Cloud Platform enables enterprises to run Kubernetes in a software-defined infrastructure environment that can scale rapidly. The recent enhancements include features like a broad Kubernetes ecosystem that supports most leading Kubernetes container platforms with the addition of Amazon EKS-A; a built-in Infrastructure-as-Code operating model that will enable automation at scale and access to a strengthened data service for modern applications.

Nutanix also continues to build on Elevate, its partner program. Nutanix has been leveraging the program to expand its go-to-market strategy and has been adding programs and tools to provide partners more control, insights, and efficiency over sales cycles. The recent updates to the program include the release of an enhanced and expanded incentives framework to reward partner ecosystem throughout the customer lifecycle and the extension of program incentives to include individual sellers and systems engineers to drive new customer acquisition growth. In the coming months, Nutanix will also begin to roll out a pilot program for an Elevate Program incentive that is designed to reward select partners for the delivery of consistent, on-time renewal rates with their Nutanix customers.

Potential Buyers for Nutanix

Earlier last quarter, the market was abuzz with the news that Nutanix was exploring a sale. Nutanix’s hyper-converged infrastructure which includes both hardware and service offerings makes it a very attractive player in the hybrid cloud market. Its solutions help provide organizations with the ability to manage and connect both public and private clouds with each other. Check out the Entrepreneur Journey of Nutanix Founder Dheeraj Pandey.

Analysts believe that besides private equity players scouting for a buy opportunity, there could be several other tech and cloud giants interested in the company as well. IBM, Cisco, and HPE could leverage its cloud offerings to expand their portfolio. Other potential buyers could be AWS, Microsoft, and Google who could take the Nutanix stack and integrate it with their disaggregated infrastructure to offer customers a completely interlinked service. Nutanix hasn’t yet made any announcement of a sale.

Its stock is currently trading at $28.26 with a market capitalization of $6.5 billion. It was trading at a 52-week high of $34.69 in December last year. It fell to a 52-week low of $13.44 in June this year and has recovered since.

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