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Nutanix Inc. is riding high today after reporting first-quarter financial results that easily beat market expectations, sending its stock soaring more than 21% in after-hours trading today.

The company, which sells so-called hyperconverged information technology infrastructure that integrates compute, storage and networking components, reported a loss before certain cost such as stock compensation of 71 cents per share on revenue of $314.8 million. Wall Street was expecting a bigger loss of 75 cents per share on revenue of just $306.45 million.

Nutanix also highlighted its expanded customer base, ending the quarter with 14,960 total customers. The company also closed a record high of 66 deals worth more than $1 million in the quarter.

Update: Shares were up a somewhat more modest 15% in Tuesday trading.

“Our solid Q1 performance, particularly in the Americas, gives us confidence that we have the right formula for global sales leadership as demonstrated by improved productivity and sales hiring over the last six months,” Nutanix Chief Executive Officer Dheeraj Pandey said in a statement. “We have also seen momentum in key areas of our business, including the transition to subscription and an improved 28% attach rate of new products onto our core HCI platform.”

Pandey was referring to the company’s rapid transformation of its business model. Just two years ago, Nutanix was primarily seen as a hardware company, selling a combined server and storage platform for corporate data centers. But today, Nutanix describes itself as a “pure software company” that sells a virtualization platform for hybrid and multicloud deployments.

The transition to a subscription business model was a painful one, though, with the company’s stock losing more than 31% of its value in a single day at one point following an especially disappointing earnings report.

Analyst Steve McDowell of Moor Insights & Strategy told SiliconANGLE Nutanix has shown that it has managed to weather the transition and it’s now poised for growth.

“The financials are all pointing the right direction, subscription revenue has nearly doubled year over year, customer counts are up, and deferred revenue is up 40% to $975 million,” McDowell said. “Nutanix is a healthy company that’s showing great market acceptance.”

Holger Mueller, an analyst with Constellation Research Inc., said Nutanix’s successful transition was a showcase for how technology companies can transform themselves.

“The vendor is on track with its subscription pricing and sales models and it’s delivering its transformation roadmap,” Mueller said. “At the same time, it has transformed its product portfolio successfully for the hybrid cloud era, allowing workload portability across public cloud and on-premises for next-generation apps.”

McDowell also highlighted Nutanix’s recent partnership with Hewlett Packard Enterprise Co. The two companies announced plans earlier this year to integrate Nutanix’s flagship Enterprise Cloud OS software with HPE’s GreenLake consumption-based product. They also sell an integrated appliance that combines HPE’s ProLiant and Apollo servers with Nutanix software. The success of those products was the real reason for investors’ excitement, the analyst said.

“There was some question about how important that business would be, with HPE downplaying it a little when it was announced,” McDowell said. “But what a difference a few quarters make. Nutanix’s HPE business is making good money and growing beyond analyst expectations. It seems to be getting really good traction as part of HPE’s GreenLake on-demand business.”

For the second quarter, Nutanix said it’s expecting a loss of 70 cents per share, which is in line with Wall Street’s estimates.

“I don’t see any short-term warning signs,” McDowell said. “The ship seems to have righted itself. If they deliver to the guidance they gave, it should be a good 2020 for Nutanix.”

Pandey talked with theCUBE, SiliconANGLE Media’s livestreaming studio, about Nutanix’s vision and the future of hyperconverged infrastructure last month at the company’s .NEXT EU conference in Copenhagen:

Photo: SiliconANGLE