Technology startup Nutanix went public last October. After the initial surge post listing, the stock hasn’t seen many good days. Last month as the lockup period on the shares expired, the stock fell even further. It does still retain a Billion Dollar Unicorn status, albeit at reducing valuations.

Photo Credit: gothopotam/Flickr.com

Nutanix’s Financials

Nutanix’s second quarter revenues grew 77% to $182.2 million, compared with the market expectations of $178.3 million. Loss per share came in at 66 cents. Adjusted loss of $0.28 per share was better than the Street’s forecast of a loss of $0.35 per share.

By segment, product revenues grew 71% over the year to $138.5 million, and support and other services revenues grew 103% to $43.7 million. Billings grew 59% to $227.4 million. It added 900 new customers during the quarter.

Nutanix expects revenues of $180-$190 million for the third quarter with a loss of $0.48-$0.45 per share. The loss forecast was significantly higher than the Street’s expectation of a loss of $0.35 per share. The market had estimated revenues of $187.4 million for the third quarter.

Nutanix’s Growing Competition

A report published by Gartner last year estimates the hyperconverged integrated systems market to have grown 79% to be worth $2 billion in 2016. The industry is expected to grow 24% to $5 billion by 2019. Nutanix is the market leader with nearly 50% market share followed by SimpliVity, which comes in a distant second with 20% market share. The rest of the market is very fragmented.

While Nutanix may be the leader, competition in the industry is heating up. Earlier this year, SimpliVity was acquired by HPE. This will help put HPE’s bigger channel behind SimpliVity’s offerings. It is expected to help combine HPE’s infrastructure, automation, and cloud management software with SimpliVity’s software-defined data management platform to help deliver the industry’s only built-for-enterprise hyperconverged offering. Last year, Cisco had expanded its offering in the form of the HyperFlex Systems portfolio that has already been shipped to more than 1,100 customers since launch. Dell has also completed its acquisition of EMC, a move that many believed would hurt Nutanix.