Nimble Storage, Inc. (NYSE:NMBL) posted third-quarter fiscal 2017 results wherein loss of 45 cents a share came in narrower than the Zacks Consensus Estimate of a loss of 48 cents while revenues of $102 million were in line with the same.
However, the loss was much wider than the prior year quarter’s loss of 36 cents. Shares were down 12.9% in the aftermarket session following the results. Revenues were up 26.4%.
Nimble reported non-GAAP loss (excluding stock based compensation) per share of 18 cents compared with a loss of 14 cents reported in the year-ago quarter.
Nimble credited strong AFA bookings for the good performance. AFA bookings grew 24% in the quarter compared with 17% in the previous quarter. The company added 217 AFA customers. Overall, the company’s customer base grew 38% year over year, taking the total count to 9,450 customers.
The company’s revenues from products increased 24% to $81.3 million in the quarter, while the same from support and services business improved a robust 36.9% to $20.7 million.
The company’s gross margin (non-GAAP) was 66%, a decrease of 90 basis points (bps) from the year-ago quarter. Non GAAP net loss widened to $15.4 million from $10.8 million reported in the prior-year quarter.
Nimble Storage exited the quarter with cash and cash equivalents of $180.7 million, compared with $211.2 million as of Jan 31, 2016.
In the third quarter of fiscal 2017, the company used cash from operating activities to the tune of $11.3 million. In the quarter, capex was $6.7 million leading to negative free cash flow of nearly $18 million.
Total cash used from operating activities in the first nine months amounted to $23.7 million.
Guidance
For the fourth quarter of fiscal 2017, the company expects revenues in a range of $112 million to $115 million. Non GAAP operating loss is expected to be $11 million to $13 million. Non-GAAP loss per share is projected in the range of 13 cents to 15 cents.
To Conclude
Nimble Storage is positioning itself to benefit from the ongoing shift to flash-centric architectures from the conventional disk-centric architectures with its Adaptive Flash platform. Meanwhile, the company has been acquiring large enterprise customers and equally concentrating on growing its mid-size customer base. Nimble struck a deal with Lenovo that will enhance its converged infrastructure solutions portfolio.
The company launched AF-series All Flash Arrays storage equipment that relies solely on flash memory chips. Analysts view this as a big positive for the company that will allow it to gain traction in the all flash segment. However, they are wary of stiff competition from existing players like EMC (NYSE:EMC) and Pure Storage, which might weigh on Nimble’s margins.
Currently, Nimble has a Zacks Rank #4 (Sell). Some better-ranked stocks in the tech space include TiVo Corp. (NASDAQ:TIVO) , Sabre Corporation (NASDAQ:SABR) and Facebook Inc. (NASDAQ:FB) While TiVo sports a Zacks Rank #1 (Strong Buy), Sabre and Facebook carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TiVo, Sabre and Facebook have posted positive earnings surprises of 97.76%, 9.67%, and 21.11%, respectively, in the trailing four quarters.
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