Nutanix Inc., a major maker of software for managing cloud and on-premises infrastructure, is reportedly exploring a sale.

The Wall Street Journal today cited people familiar with the matter as saying that Nutanix began weighing a sale after receiving takeover interest. However, it’s reportedly “far from certain” that a sale will take place. 

The report didn’t specify the potential buyer or buyers who expressed interest in purchasing Nutanix. However, the Journal’s sources suggested that Nutanix may seek to secure bids from other prospective acquirers. The company is reportedly “expected to target” private equity firms, as well as fellow market players in the tech industry.

Nasdaq-traded Nutanix sells a collection of software products that organizations use to manage their compute, storage and network infrastructure. Nutanix’s software can be installed in public cloud environments to ease day-to-day maintenance tasks. The company also offers versions of its products that run on hyperconverged infrastructure appliances, which combine computer, storage and network equipment in a single chassis that companies can deploy on-premises.

Nutanix went public in 2016. In the years since, the company has expanded its focus to several new market segments. 

Nutanix in 2018 launched a service called Era that can help organizations manage their database deployments. In 2020, it debuted a managed Kubernetes platform that reduces the amount of manual work needed to operate software container environments.

One of the newest additions to the company’s product portfolio, Nutanix Data Lens, helps companies manage unstructured data. It enables administrators to centrally monitor how business records are used and detect potential ransomware attacks. The service also eases several other tasks, including the process of moving data stored on-premises to the cloud.

Nutanix generated revenue of $385.5 million in its most recent fiscal quarter ended July 31, significantly more than what analysts had expected. The company’s revenue guidance for the current quarter and its 2023 fiscal year surpassed expectations as well. Nutanix says its technology is used by more than 22,000 organizations worldwide.

According to the Journal, it’s believed that a potential sale would value Nutanix significantly higher than its Thursday market capitalization of about $5 billion. Today, shares of the company jumped more than 23% in trading on the report that it may be acquired. The steep share price jump suggests that investors also expect Nutanix to fetch a significant premium in any prospective acquisition.

The report of the potential acquisition comes amid an effort by the company to shift from selling software licenses to a subscription-centric business model. Nutanix reported that annual contract value bookings, a metric tied to subscription sales, grew 10% last quarter. Annual recurring revenue increased 37% year-over-year. 

Photo: Nutanix