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Shares of cloud computing company Nutanix are surging today, up about 19% as its fourth quarter earnings and full-year guidance topped analyst expectations. Wall Street is responding with a slew of price target hikes. Raymond James, Barclays, Morgan Stanley and more now seeing upside for Nutanix stock. We have Rajiv Ramaswamy, the CEO of Nutanix on for more this morning. Rajiv, congratulations on the quarter and the stock clearly doing well. Investors liking what they're seeing. You guys also reported your first full year of positive gap operating income. What do you credit for that?

Yeah, I mean, we had a strong finish to the year overall and in the last quarter as well. Our ARR grew 22%, our free cash flow generation was 598 million, which is almost three times last year, and overall we hit a Rule of 40 score of 43. Now, the reasons for all of these are that fundamentally we have a platform that is great for running critical applications for customers around the world. Companies are looking to us in a difficult macro environment for helping them reduce their TCO, enable them to transform themselves. And we feel good about the year here in terms of the progress we were able to achieve. The platform is great for large customers such as Wells Fargo investing in our platform as a key partner and customer. We've made significant innovations in terms of our platform or modern applications and generative AI, and more recently, significant go-to-market leverage through partners, big partners such as Cisco and more recently Dell. So all of this is contributing helped us beat our guided estimates for the year and for the quarter and also came in about consensus for our next full fiscal year guide.

What type of uptick have you seen in generative AI applications that are relying on Nutanix right now to to make sure that they can continue to have solid user experience or just putting into market what is expected of some of these applications very early days?

Yes, indeed, it is, as you said, Brad, very early days for companies actually using generative AI in production. And a lot of important things to be figured out. First, they need a simple platform to run this. They need to be able to run this in a secure way, maintain their IP, and also run it wherever their data is located. And data these days is located everywhere. Some of it is the public cloud, but a lot of sensitive enterprise data is sitting inside data centers and at their edges. And so we provide a platform that helps all of this run in a very simple way. Now, companies, I would say, are still in the early stages of deploying generative AI. They're looking at use cases such as document search and analysis, co-piloting for their developers, customer support, enhanced fraud detection. And what I will say is it's very broad-based. We see companies across financial services, healthcare, public sector, defense all now thinking about how they can actually use generative AI in a secure private way.

And partnerships a clear standout in your fiscal 2024 results, Nutanix signing new or enhanced agreements with Cisco, Nvidia, Dell. Can you explain the significance of those partnerships and how that ultimately helps customers?

All of these are great market leaders and we are thrilled to be able to partner with them. In terms of Cisco and Dell, both of them are actually taking our solutions to market. Cisco's reselling our product. They have been for most of the last year. Dell is our most recent addition, and they are also now in the market with our product. And as you can imagine, they have a huge presence in the industry in terms of their footprint and they're a market leader and it's great that they are now taking our products to market. It is a sign that we are truly the platform for companies to run their applications and that's why we've seen all these folks partner with us. And with Nvidia, specifically, it's around really making enterprise AI available for companies to use in a secure way.

Do you want Nutanix to be thought of as an AI company? What is the profile that you would like investors to have in their mind as they're figuring out exactly what that growth profile and trajectory that you've talked about on the call yesterday, what that really looks like going forward?

Yeah, I think the one liner here would be that we want to be the leading platform for companies to run all their applications and manage their data anywhere. And if you look at that set of applications, perhaps the most modern of all applications there is generative AI. And so we want to be that platform for companies to run generative AI applications as well, but all applications in the enterprise.

And one of your prior competitors, VMware, recently purchased by Broadcom. Are you open to M&A opportunities either as a buyer or a seller? And do you expect in the software space at large, we're going to see more M&A tick up?

Yeah, first of all, I think in terms of us acquiring companies, I mean, for us technology tuck-ins, we do as a matter of course. We did some this last year as well. We acquired a company called D2iQ which gave us the foundation for modern applications here. Now, in terms of us as a standalone company, as you can see here, we're doing pretty well in the market. And we continue to grow, we continue to be a key partner to some very large companies like Wells Fargo and others in the in the market. So we are on a great path in terms of an organic path and continue to drive growth, continuing to drive sustainable, profitable growth both on the top line durably and also continuing to drive bottom line leverage. So we're in a pretty happy place right now as a company and continuing to focus on our customers, our products, and driving innovation.

I mean, multi-cloud infrastructure is not cheap, Rajiv, when you think about the the deal cycle that you're seeing right now. Some of the themes that we've heard over the course of this earnings season from other enterprise software or cloud companies has been elongated deal cycles or more deal scrutiny. What is that looking like for Nutanix right now?

Indeed, Brad, you hit the nail on the head there. We've been talking about this for the last several quarters. We have seen some elongation in deal cycles and that's partly because companies want to be more clear about what they're getting in return for their investments. And companies are not deprioritizing. In fact, they are prioritizing their technology investments. And but what they're looking for is strong return on investment and therefore the approval levels are further up in the food chain, and that's where we shine. I mean, once they deploy our platform and they replace legacy platforms, they companies generally get a huge amount of total cost of ownership benefits. And that's what's playing out right now for us in the market.