We read Nutanix's homework... and the numbers look good Nutanix has filed an amended S1 IPO form with the SEC and data within it shows a strongly growing business well-set for an IPO if the financial environment is supportive. The company's latest results show satisfactory quarter-on-quarter and annual revenue growth with net losses growing less sharply and becoming a smaller …
In the last funding round, VC's valued Nutanix at $2 Billion. With this IPO, the price is based on a valuation of $1.8 Billion.
This IPO is the equivalent of a down round. Bad for investors (especially the new ones that are taking a big hit) and bad for employees with stock options.
Secondly, this IPO is set to raise ~$200 million. Lets not forget that Nutanix took out a loan of $75 million from Goldman earlier (to avoid a down round) which has to be repaid FIRST. With this IPO, they will barely be able to fund operations for the next year since they are reporting loses of $168.5 Million.
The math doesn't add up here. There is a reason why companies like Uber that took massive VC investments yet are holding out before going public. This is not a good climate to go IPO.
This IPO is a desperation move for Nutanix to survive.
Your clearly not an accountant. If you read the s1 carefully it says Nutanix pulled in about 150million in 2016 of deferred revenue most likely from the OEM/support. Deferred revenue is money you have collected already but it won't be recognized as revenue until later down the road, example support over 3 years. So for 2016 with loss of 168.5 if you add the money they collected from deferred revenue then it's about 18million they actually lossed. 200 million in funding at this rate is enough for 10 years but obviously their revenues will increase over time.
If your read carefully prior to the 75million from Goldman which it looks like they haven't touched. They had 185million in cash + (liquid assets) as good as cash. Bringing a total of 260 million prior to the IPO funding of 200 million. Combined they will have 460million. That's good for 25 years if they keep the same total revenue (revenue + deferred) - operating losses cash burn of 18million. Which if you look at the graph looks like the top line and deferred are growing much faster so should come
Positive in the not to distant future if they continue the growth trajectory.
Which is why they are valued *down* to $1.8 Billion?
LOL, deferred revenue is on the books as revenue not yet earned (such as support contracts). From an accounting perspective, you wouldn't plan on that to pay the bills this year. It's good for cash flow though.
There's some accounting for you.
Ok then please explain this then. Total funding is $312 million + 75million loan = $387 million. Total accumulated losses $422 million. According to you guys they should have gone out of business last quarter and be nearly 40 million in the hole. Yet they have $185 million is cash and cash equivalent short term investments. Go on geniuses, explain.
This IPO is turning into a bank to run the operations of the business which will only dilute employee options.
On the plus side, you can add "Part of team that went from startup to IPO" on your LinkedIn profile. You'll still feel like a sucker for sticking around as long as you did.
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