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Nutanix Reports Record Quarterly Results And Re-Ignites IPO Plans

Summary

Converged data center solutions vendor Nutanix prepares to go public soon.

As the computing needs increase and are expected to continue rising, cost-saving data center solutions attract a lot of attention.

The company offers a unique converged solution that allows its clients to save up to 30.6% of their IT expenses.

With a 91% YoY revenue growth, 60% gross margin, narrowing losses, and no debt, Nutanix is an attractive investment.

Four months after it initially filed for IPO, the data center infrastructure vendor Nutanix (Private:NTNX) updated its S-1 with the SEC and re-ignited its IPO plans. Like many other startups considering an IPO, Nutanix decided to halt its IPO plans amidst the increased stock market volatility and wait for a better timing that would allow it to maximize returns and offer an optimized exit opportunity for shareholders. This strategy drove the IPO market in Q1 2016 to its lowest level since 2009 with only 8 IPOs when none of them were a technology company. For growth startups that raised money in high valuations under the assumption that investors could materialize their investments later, the quiet IPO market increased investors' illiquidity risk (the risk to hold illiquid stocks of a private company that could not be sold) and pressure companies to come up with alternatives. Furthermore, startups need to raise increasing amounts of money to finance their activity, and startups that maxed out any private market alternative will face a real operating problem.

Some companies like Spotify (Private:MUSIC) can raise debt with a clear path to IPO to satisfy both the operational needs and the investors' needs. Other companies like Nutanix prefer to go public and take the risk that the timing might be difficult but probably better than the alternatives. Nutanix...


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