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Data center software company Nutanix Inc. saw its share price dip today after reporting disappointing guidance that tempered an otherwise positive fiscal fourth-quarter earnings report.

The company said it took a net loss before certain costs such as stock compensation of $19 million, or 11 cents per share, on revenue of $303.7 million. That was an improvement on the 17-cent loss it took in the same quarter a year ago, and also easily beat Wall Street’s expectations of a 21 cents per share loss on revenue of $300.57 million.

“We ended the year on a high note with a record quarter on many fronts, positioning us extremely well for the future,” founder and Chief Executive Dheeraj Pandey said in a statement. “We will continue to invest in talent and hybrid cloud technology while incubating strategic multicloud investments.”

Nutanix, which sells “hyperconverged infrastructure” software for data centers that’s used to manage networks, storage and servers, said its software and support revenue topped $267 million, up 49 percent year-over-year. Software and support billings revenue did even better at $359 million, up 66 percent.

Nutanix has beaten Wall Street’s consensus earnings-per-share estimate in three of the last four quarters, but the company’s stock still fell by more than 6 percent in after-hours trading as its first-quarter guidance came in below forecasts. Update: In trading Friday, shares fell 7.4 percent, to $56.32 a share.

For the first quarter, Nutanix said it’s expecting to see a loss before certain costs such as stock compensation of between 26 cents and 28 cents per share, on revenue of $295 million to $310 million. Analysts were hoping for more, predicting a loss of 22 cents per share on average, with revenue totaling $311.8 million.

Nutanix’s problems stem from an ongoing transition that’s fairly common among Silicon Valley companies that need to broaden their horizons in pursuit of further growth, said analyst Charles King of Pund-IT Inc.

“In Nutanix’s case, that process encompasses shifting from the hyperconverged infrastructure and appliance offerings it’s well-known for, to software-defined and hybrid/multicloud solutions,” King said.

The biggest issue for Nutanix in this regard is that the new growth markets it’s targeting are already quite mature, populated by rival companies that are generally bigger and better-financed. Still, King said Nutanix is growing well in the face of these challenges.

“Unfortunately, it’s also losing a tidy sum during the process,” King added. “While it crossed the $1 billion annual run rate in fiscal 2018 that so many companies aim for, it also lost nearly $300 million, so it’s worth asking how much patience Nutanix shareholders are willing to extend to the company as its transition continues.”

In a conference call Pandey said the lower-than-expected guidance is a reflection of “a faster removal of pass-through hardware than originally anticipated.”

The CEO also tried to drum up some excitement about Nutanix’s growth potential as it looks at new markets, citing this month’s acquisition of desktop-as-a-service company Mainframe2 Inc., whose platform lets companies deliver Windows applications to employee devices from the cloud.

“Frame increases our addressable market, brings another service to our growing platform and adds employees with insurgent mindsets who will help us continue to challenge the status quo,” Pandey said.

Holger Mueller, principal analyst and vice president of Constellation Research Inc., said Nutanix’s main challenges for the year ahead will involve integrating new offerings such as Frame and managing its investor’s expectations.

“Good growth and work on profitability has happened, but the vendor needs to learn to provide better guidance,” Mueller said. “Even though investors understand the market unpredictability to a point, once you are in the $1 billion-plus category, forecast quality has to improve. Now it will be all about managing growth in the coming year and how new offerings, like the new desktop-as-a-service, will succeed in the markets.”

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