Nutanix has told investors that they’re on course for easy profit within two years. The CEO claims that the forecast looks bright because more users are converting to subscribers than ever before.
Nutanix’s CEO is confident that they see a ‘clear path to profitability’ predicting that they will attain black ink by the end of 2022’s business year.
Nutanix, a hyper-converged upstart, shared their prediction on Tuesday at “investor day,” where Rajiv Ramaswami, the CEO, shared the numbers with investors.
The company, originally founded in 2009 and then floated back in 2016, reported its 2021 Q3 results during late May. Taking from those results, Ramaswami told The Register how cash flow positivity is attainable within two years, with profit flowing easily in 2023.
How viable is the prediction?
Ramaswami stated that this uplifting forecast has come about due to people converting to subscription plans. This helps the company predict revenue and makes it less of an effort to renew subscriptions instead of pursuing new sales.
The CEO said that it is a given that it’s easier to engage with customers when they are subscribers and ensure them that they get real value in return for the monthly payment they give. Due to increased contact, more opportunities are created to sell to them, which lowers marketing and sales costs.
Investors were also told how Nutanix now focuses on using its resources rather than investing in its growth. That approach will result in the company putting more effort in markets it sees as beneficial additions to their portfolio that will appeal to their customers.
Ramaswami, therefore, emphasized how he believed in their potential of hybrid cloud businesses and managed databases and stated that the effort to ensure hybrid cloud businesses through Arm CPUs could wait until they have formed a proven market.
Other factors that may impact the predicted growth
The CEO also claims to be optimistic because he sees an increase in the industries depending on tourism and discretionary spending investments.
He said, “Last quarter, we started seeing orders from casinos, also the transport and hospitality sectors.” This suggested that due to their increased need for tech signals, the economy has started recovering since the recession created by COVID.
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