Nimble Storage Gets Clobbered But Is It A Buy?
Alpha Gen Capital
Alpha Gen Capital
Nimble: Tech Still Has Good Growth Stories
Darspal S Mann
Darspal S Mann
Tue, May 24, 4:41 PM
- Flash storage maker Nimble Storage (NYSE:NMBL) is up 7.4% following Q1 earnings where it beat on top and bottom lines and grew its customer base substantially, though losses widened overall.
- Operating loss widened to $42.2M from a year-ago $28.9M, and non-GAAP net loss to $20.1M from $8M. Gross margin also slipped, to 65.7% on a non-GAAP basis from a year-ago 67.6%.
- Revenue breakout: Product, $68.4M (up 13.6%); Support and service, $18M (up 62.5%).
- All Flash Arrays accounted for 12% of total array bookings after launch, and large deals (greater than $250K) were up 51%. The customer base grew 48% Y/Y.
- The company's guiding to Q2 revenues of $93M-$96M (above consensus for $92.8M) and a non-GAAP net loss of $0.19 to $0.21, in line with expectations.
- Conference call to come at 5 p.m. ET.
- Press Release
Tue, May 24, 4:02 PM
Mon, May 23, 5:35 PM
Thu, Mar. 3, 5:22 PM
- Though Nimble Storage (NYSE:NMBL) beat FQ4 sales estimates and posted in-line EPS, the company is guiding for FQ1 revenue of $83M-$86M and EPS of -$0.25 to -$0.27 vs. a consensus of $85.6M and -$0.16.
- The company blames the guidance on: 1) Seasonal weakness. 2) The potential impact of Nimble's all-flash array launch on existing sales cycles. 3) $4M in incremental product launch and go-to-market costs. 4) Higher sales/marketing investments to "re-accelerate growth" in Nimble's SMB ops and to drive all-flash array sales.
- FQ4 details: Product revenue (drives future support/service revenue) rose 25% Y/Y to $78.1M. Support/service revenue rose 77% to $17M. Non-GAAP gross margin fell 80 bps Y/Y to 66.4%. GAAP operating expenses rose 32% to $89.9M. Nimble ended FQ4 with $211M in cash, no debt, and a $115M deferred revenue balance.
- Nimble is down 8% after hours to $7.59, and down over 60% from where it traded prior to November's post-earnings plunge.
- Nimble's FQ4 results, earnings release
Thu, Mar. 3, 4:03 PM
Wed, Mar. 2, 5:35 PM
Nov. 20, 2015, 4:45 PM
- Barclays, Monness Crespi, Oppenheimer, Pac Crest, Raymond James, RBC, Stifel, UBS, Wells Fargo, William Blair, and Wunderlich all downgraded Nimble Storage (NYSE:NMBL) to neutral ratings in response to the company's FQ3 miss and weak FQ4 guidance. Shares closed at $10.05, making new post-IPO lows along the way.
- Those downgrading generally cited some mixture of competitive concerns, sales execution questions, and delayed profitability as the hybrid storage array vendor ramps investments in the face of slower-than-expected growth. Some also made the case a turnaround will take several quarters.
- UBS' Steve Milunovich: "Nimble’s problems are both self- and market-made ... It turned out that booking business in the enterprise has been more difficult than expected. A contributor to that difficulty is the lack of storage market growth and increasing competitiveness as EMC, NetApp, and others fight for fewer deals. The result for Nimble is some combination of (1) elongated sales cycles, (2) lost deals (the company claims no change in enterprise win rate), or (3) lower pricing (discounts did affect the product margin)."
- Raymond James' Brian Alexander: "We suspect public cloud migration is accelerating, and this is causing storage incumbents to become more aggressive in protecting their installed base, and Nimble cannot seem to pry customers away with its hybrid offering. All-flash arrays are likely going to have a larger impact as well, as flash price declines narrow the price/performance gap previously enjoyed by Nimble."
- William Blair's Jason Ader: "Nimble’s hybrid story has quickly aged against the all‐flash and hyperconverged trends sweeping the industry, providing daylight for exceedingly aggressive newcomers with little regard for profit margins. On the [SMB] side, while management insists that win‐rates are unchanged and reinvestment will solve the issues, we cannot help but worry that aggressive startups are leaping to take advantage of the opportunity. On top of all of this, the public cloud looms as an ever‐present, undiscriminating threat to on‐ premise storage in general."
- BMO's Keith Bachman is keeping an Outperform rating, even as he admits his original thesis was off. "We had previously assumed (incorrectly) that Nimble’s technology advantage would enable the company to take share in both the midmarket and enterprise, while also gradually growing profits and cash flows. However, we think the challenges of Nimble’s competitors are now engulfing Nimble, in terms of both revenue growth and profits." He thinks Nimble's planned entrance into the all-flash array could help, but isn't assuming a big contribution for now.
- However, Bachman also argues Nimble, whose market cap now stands at $783M, could make a compelling buyout target, particularly given a buyer could eliminate much of the company's non-R&D spend. "The incumbent storage vendors are seeking growth and could meaningfully improve Nimble’s sales leverage ... Nimble’s gross margins remain 67%, which would be accretive to Nimble’s competitors."
Nov. 19, 2015, 4:35 PM
- Nimble Storage (NYSE:NMBL) has plunged to $12.99 after hours after missing FQ3 estimates and guiding for FQ4 revenue of $87M-$90M and EPS of -$0.11 to -$0.13, below a consensus of $99.2M and $0.00.
- CEO Suresh Vasudevan: "[W]hile we are acquiring large enterprise customers at a strong pace, our enterprise investments are taking longer to become fully productive. Second, we believe the shift in investment from commercial to enterprise business impacted our commercial revenue growth more than we anticipated ... We plan to make some key investments to drive growth that will constrain short-term profitability ... We expect that it will take several quarters to realize the impact of these investments and have factored that into our guidance for Q4FY16."
- Product revenue (drives future support/service revenue) rose 28% Y/Y to $65.6M. Support/service revenue rose 90% to $15.2M. Gross margin fell 20 bps Y/Y to 66.9%. GAAP operating expenses rose 23% Y/Y to $81M.
- Pure Storage (NYSE:PSTG), which went public last month, has fallen to $17.00. Of note: Nimble sells hybrid flash/disk arrays and depends heavily on SMBs, while Pure sells all-flash arrays and has more of an enterprise focus.
- Nimble's FQ3 miss, PR
Nov. 19, 2015, 4:04 PM
- Nimble Storage (NYSE:NMBL): Q3 EPS of -$0.14 misses by $0.06.
- Revenue of $80.73M (+36.6% Y/Y) misses by $6.71M.
- Shares -30%.
Nov. 18, 2015, 5:35 PM
Aug. 25, 2015, 5:09 PM
- Nimble Storage (NYSE:NMBL) is up 1.9% after hours after beating FQ2 estimates with the help of 690 customer adds, up from FQ1's 542 and a new record.
- FQ3 guidance is for revenue of $86M-$88M and EPS of -$0.08 to -$0.09; the former is favorable to an $86M consensus, and the latter below a -$0.07 consensus.
- Product revenue (hardware/software) rose 42% Y/Y in FQ2 to $66.8M, and support/service revenue 102% to $13.4M. Gross margin rose 20 bps Q/Q and 40 bps Y/Y to 67.8%.
- GAAP operating expenses rose 34% Y/Y to $81.8M (compares with 49% revenue growth), with $47.9M going to sales/marketing $24.5M to R&D, and $9.4M to G&A. Free cash flow was $9M, up from the year-ago period's -$1.3M and better than net income of -$7.8M.
- FQ2 results, PR
Aug. 25, 2015, 4:02 PM
- Nimble Storage (NYSE:NMBL): FQ2 EPS of -$0.10 beats by $0.01.
- Revenue of $80.1M (+49.0% Y/Y) beats by $1.53M.
Aug. 24, 2015, 5:30 PM
May 26, 2015, 4:22 PM
- In addition to beating FQ1 estimates, Nimble Storage (NYSE:NMBL) is guiding for FQ2 revenue of $77M-$79M, mostly above a $77.1M consensus. EPS guidance of -$0.11 to -$0.12 compares with a -$0.12 consensus.
- 542 new customers were added in FQ1, down from 650 in seasonally stronger FQ4 but up from 450 a year ago. Nimble, which has been trying to move upmarket with the help of its recently-launched Fibre Channel arrays, also claims to have more than doubled its bookings from enterprise and service provider clients.
- Financials: Gross margin rose 40 bps Q/Q and 140 bps Y/Y to 67.6%. GAAP operating expenses rose 51% Y/Y to $75.4M (compares with 53% rev. growth) - sales/marketing spend totaled $44.4M, R&D $21.7M, and G&A $9.3M. Nimble ended FQ1 with $201.5M in cash, and no debt.
- NMBL +1.6% AH to $25.80.
- FQ1 results, PR
May 26, 2015, 4:02 PM
- Nimble Storage (NYSE:NMBL): FQ1 EPS of -$0.10 beats by $0.03.
- Revenue of $71.3M (+53.2% Y/Y) beats by $1.53M.
Nimble Storage, Inc. provides data storage platform. The company's Adaptive Flash platform, CASL flash-optimized file system and InfoSight cloud-based management software, are delivered as CS-series storage arrays coupled with support services and InfoSight subscription services. It enables IT... More
Industry: Data Storage Devices
Country: United States
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