Nutanix Inc (NASDAQ:NTNX) stock fell 8.93% (As on March 7, 11:32:25 AM UTC-4, Source: Google Finance) after the company reporting better-than-expected Q2 preliminary results. Nutanix said in a statement that it is only offering preliminary results at this time because its accounts were not audited. That happened after a discovery that certain evaluation software from one of its third-party providers was used instead for interoperability testing, validation and customer proofs of concept over a multiyear period. The Audit Committee commenced an investigation into this matter, which is still ongoing, hence the full results are delayed. The company said it doesn’t think it will have a “significant impact on the fundamentals of its business and overall prospects.” During the quarter, there was speculation that Nutanix had emerged as an acquisition target for technology giant Hewlett Packard Enterprise Co., with a hefty price tag of more than $7 billion floated around. Initially, the rumored interest sent Nutanix’s stock higher, but a spokesperson for HPE later told media that the company was not holding talks about a possible acquisition, and the matter appears to be closed. Further, during the second quarter, the company delivered meaningful upgrades to our core platform with the release of AOS 6.6, which offers enhanced data services and a number of networking and security-related features, further strengthening its capabilities to support business-critical applications.

The company had reported the adjusted revenue growth of 18 percent to $486.5 million in the second quarter of FY 23, beating the analysts’ estimates for revenue of $464.97 million. Annual Contract Value (ACV) billings were up 23% year-over-year to $267.6M, while Wall Street forecasting earnings of 11 cents per share and ACV billings of $247.3 million. The company didn’t report earnings. Q2 revenue also benefited approximately $11 million from the improvement in percentage of future start dates as more license revenue was recognized in quarter than deferred, slightly more than the $10 million estimate. Billings linearity was good, and DSOs were 28 days in Q2. Free cash flow in Q2 was $63 million, implying record free cash flow margin of 13%.

For Q3/23, the company expects revenue in the range of $430M-$440M, compared to the consensus of $425.38M. ACV billings are seen at $220M-$225M.

For the full year, the company expects revenue in the range of $1.8 billion-$1.81 billion, compared to the consensus of $1.78B. ACV billings are expected in the range of $905M – $915M.