Nutanix, Inc.
Information Technology · Systems Software
Structural read: $NTNX is the largest pure-play Broadcom-VMware refugee beneficiary, paired with a Cisco OEM partnership (Feb 2024) that bundles Nutanix Cloud Platform on Cisco UCS servers - converting Cisco's enterprise channel into a Nutanix distribution arm.
ARR ~$2B, FCF margin inflected to ~25%+, GAAP profitability in sight. Multi-year renewal cycle plays into Nutanix's hands as VMware ELAs come up for re-pricing under Broadcom's consolidation.
- Broadcom's VMware per-core repricing (3-10x in some cases) creates a multi-year tailwind on every VMware renewal globally
- Cisco OEM (announced Feb 2024) gives access to ~$50B+ UCS installed base via Cisco's sales force
- Subscription/ARR model with land-and-expand (NRR historically 110%+); free AHV hypervisor undercuts VMware on price
- FCF margins inflected from negative to 25%+; first GAAP-positive quarters arriving; share count finally stabilizing
- AI workload positioning via NC2 (Nutanix Cloud Clusters) on $AWS/$AZURE-Microsoft, and GPT-in-a-Box for on-prem inference
- Enterprise deal cycles are long; "VMware refugee" narrative has been a 2-year setup with conversion lumpier than bulls model
- Direct comp to $VMW (now inside $AVGO) - Broadcom can cut VMware price floor any quarter to defend installed base
- HCI market growth has matured; share gains, not market growth, must drive the next leg
- Competes with hyperscaler-native services ($AWS Outposts, Azure Stack) on hybrid workloads
- Stock-based comp still ~20% of revenue; GAAP path narrow if growth decelerates
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