Why Pivotal Software Inc (NYSE: PVTL) stock crashed

Free $100 Forex No-Deposit Bonus

Pivotal Software Inc (NYSE: PVTL) stock lost over 41.3% on June 6th, 2019 (Source: Google finance). %. Operating loss for the first quarter was $11.8 million, with an operating margin loss of 6%, improving 7 points from Q1 of last year. PVTL has exited Q1 with $854.2 million in cash and cash equivalents. PVTL in the first quarter of FY 20 has reported the adjusted loss per share of 3 cents. In Q1, services revenue fell by 13% year-over-year to $56.9 million and represented 31% of total revenue compared to 42% a year ago. Services revenue came in slightly lighter than the company had expected due to fewer customer engagements and fewer software deals than expected.

Why Pivotal Software Inc (NYSE: PVTL) stock crashed

Total gross margin rose 70% for Q1 and improved 6 points year-over-year, primarily due to the top line subscription revenue growth, which continued to drive mix shift towards subscription revenue. This is the first quarter where the company achieved a 70% gross margin and moved above the 60% range. Subscription gross margin was 94% and services gross margin was 17Cash flow from operations was $122.2 million in Q1 versus $4.5 million in Q1 of last year. Strong cash flow generation was attributable to strength in collections activity.

The company had reported the adjusted revenue growth of 19 percent to $185.72 million in the first quarter of FY 20. Subscription revenue generated $128.9 million in Q1 with year-over-year subscription growth at 43%. The subscription customer base grew 13% year-over-year to end the first quarter with a total of 383 subscription customers. PVTL has added 6 net new customers in the first quarter. The subscription outperformance in Q1 was mainly due to an expansions as customers increased the number of workloads they are running on PCF and expanded their consumption of the software. Moreover, PVTL plans to  invest in the Go to Market teams, while continuing to build the pipeline, deepen the relationships with existing customers, and acquire new customers. R&D expense was $49.8 million in the first quarter, or 27% of total revenue, which is an increase of 20% year-over-year, reflecting continuing investments in the product roadmap and engineering talent.

Meanwhile, PVTL finished the first quarter with $880 million of RPO, growing by 10% year-over-year. This was lower than the company had expected mainly due to sales execution and shorter contract duration.

Copyright © 2019. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.