Nutanix, Inc. 10-K

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our Class A common stock began trading publicly on the NASDAQ Stock Market under the ticker symbol "NTNX" on September 30, 2016. Prior to that time, there was no public market for our Class A common stock. The following table sets forth, for the periods indicated, the high and low sale prices of our Class A common stock as reported on the NASDAQ Global Select Market. Fiscal 2019 Fiscal 2020 Fiscal Quarter: High Low High Low First quarter $ 61.13 $ 35.95 $ 29.51 $ 18.20 Second quarter $ 52.23 $ 36.13 $ 37.35 $ 26.62 Third quarter $ 54.14 $ 33.51 $ 37.42 $ 12.49 Fourth quarter $ 42.98 $ 22.70 $ 25.35 $ 17.64 Our Class B common stock is not listed nor traded on any stock exchange. Holders of Record As of July 31, 2020, there were 122 holders of record of our Class A common stock. This figure does not include a substantially greater number of "street name" holders or beneficial holders of our common stock whose shares are held of record by banks, brokers and other financial institutions. As of July 31, 2020, there were approximately 45 stockholders of record of our Class B common stock. Dividend Policy We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends in the foreseeable future. Any future determination to declare dividends will be made at the discretion of our Board of Directors, subject to applicable laws and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our Board of Directors may deem relevant. Unregistered Sales of Equity Securities and Use of Proceeds None. Purchases of Equity Securities by the Issuer None. 50 Table of Contents Stock Performance Graph The following graph shows a comparison from September 30, 2016 (the date our Class A common stock commenced trading on the NASDAQ Stock Market) through July 31, 2020 of the cumulative total return for our Class A common stock based on the closing price on the last day of each respective period. The graph assumes an initial investment of $100 on September 30, 2016 in the common stock of Nutanix, Inc., the NASDAQ Composite Index and NASDAQ Computer Index and assumes reinvestment of any dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance. Fiscal Year 9/30/16 7/31/17 7/31/18 7/31/19 7/31/20 Nutanix, Inc. $ 100 $ 57.42 $ 132.14 $ 61.35 $ 59.97 Nasdaq Composite Index $ 100 $ 120.60 $ 147.29 $ 158.70 $ 210.72 Nasdaq Computer Index $ 100 $ 126.39 $ 161.66 $ 180.60 $ 267.85 The information on the above graph shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act, and shall not be incorporated by reference into any registration statement or other document filed by us with the SEC, whether made before or after the date of this Annual Report on Form 10-K, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing. Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2020 annual meeting of stockholders, which will be filed no later than 120 days after the end of our fiscal year ended July 31, 2020. 51 Table of Contents Item 6. Selected Consolidated Financial and Other Data The selected consolidated statement of operations data for fiscal 2018, 2019 and 2020 and the consolidated balance sheet data as of July 31, 2019 and 2020 are derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The selected consolidated statement of operations data for fiscal 2016 and fiscal 2017 and the consolidated balance sheet data as of July 31, 2016, 2017 and 2018 were derived from audited financial statements not included in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected in the future. The selected consolidated financial data below should be read in conjunction with the section entitled "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in Part II, Item 7 of this Annual Report on Form 10-K and our consolidated financial statements and related notes included in Part II, Item 8 of this Annual Report on Form 10-K. We adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"), effective August 1, 2017. For the fiscal years ended July 31, 2016 and 2017, we have recast certain of our financial data, as disclosed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2018. Fiscal Year Ended July 31, 2016 2017 2018 2019 2020 (in thousands, except per share data) Consolidated Statement of Operations Data: Revenue: Product $ 413,910 $ 673,297 $ 887,989 $ 832,419 $ 765,822 Support, entitlements and other services 89,500 172,606 267,468 403,724 541,860 Total revenue 503,410 845,903 1,155,457 1,236,143 1,307,682 Cost of revenue: Product (1)(2) 133,541 249,393 276,127 143,078 71,312 Support, entitlements and other services (1) 37,246 77,938 109,903 161,050 215,377 Total cost of revenue 170,787 327,331 386,030 304,128 286,689 Gross profit 332,623 518,572 769,427 932,015 1,020,993 Operating expenses: Sales and marketing (1)(2) 286,584 501,021 649,657 909,750 1,160,389 Research and development (1) 116,400 288,619 313,777 500,719 553,978 General and administrative (1) 34,265 77,341 86,401 119,587 135,547 Total operating expenses 437,249 866,981 1,049,835 1,530,056 1,849,914 Loss from operations (104,626) (348,409) (280,408) (598,041) (828,921) Other expense, net (1,290) (26,377) (9,306) (15,019) (26,300) Loss before provision for income taxes (105,916) (374,786) (289,714) (613,060) (855,221) Provision for income taxes 2,317 4,852 7,447 8,119 17,662 Net loss $ (108,233) $ (379,638) $ (297,161) $ (621,179) $ (872,883) Net loss per share attributable to Class A and Class B common stockholders—basic and diluted $ (2.46) $ (2.96) $ (1.81) $ (3.43) $ (4.48) Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders—basic and diluted 43,970 128,296 164,091 181,031 194,719 52 Table of Contents (1) Includes stock-based compensation expense as follows: Fiscal Year Ended July 31, 2016 2017 2018 2019 2020 (in thousands) Cost of revenue: Product $ 391 $ 3,066 $ 2,580 $ 3,535 $ 5,334 Support, entitlements and other services 968 10,411 8,945 15,326 22,014 Total cost of revenue 1,359 13,477 11,525 18,861 27,348 Sales and marketing 8,006 78,117 65,060 107,751 126,015 Research and development 6,259 109,044 74,389 140,519 153,252 General and administrative 4,432 30,853 26,894 39,598 45,383 Total stock-based compensation expense $ 20,056 $ 231,491 $ 177,868 $ 306,729 $ 351,998 During the three months ended October 31, 2016, we recorded approximately $83.0 million of stock-based compensation expense related to performance stock awards, as we determined that the performance conditions (certain liquidity events, including our IPO, and the achievement of specified performance targets) were probable of achievement. (2) Includes amortization of intangible assets as follows: Fiscal Year Ended July 31, 2016 2017 2018 2019 2020 (in thousands) Product cost of revenue $ — $ 1,314 $ 5,641 $ 14,248 $ 14,777 Sales and marketing — 915 914 2,528 2,603 Total amortization of intangible assets $ — $ 2,229 $ 6,555 $ 16,776 $ 17,380 As of July 31, 2016 2017 2018 2019 2020 (in thousands) Consolidated Balance Sheet Data: Cash, cash equivalents and short-term investments $ 185,200 $ 349,053 $ 934,303 $ 908,834 $ 719,778 Total assets $ 411,715 $ 738,212 $ 1,599,880 $ 1,786,042 $ 1,768,547 Deferred revenue (current and non-current portion) $ 218,481 $ 369,056 $ 631,207 $ 910,044 $ 1,183,441 Long-term debt $ 73,260 $ — $ 429,598 $ 458,910 $ 490,222 Preferred stock warrant liability $ 9,679 $ — $ — $ — $ — Convertible preferred stock $ 310,379 $ — $ — $ — $ — Total stockholders’ (deficit) equity $ (285,827) $ 217,063 $ 326,779 $ 186,893 $ (274,977) 53 Table of Contents NUTANIX, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations