$5.6 billion cloud software company Nutanix shares soar almost 30% after Bain Capital invests $750 million, even as the CEO says he plans to retire

  • Nutanix shares jumped nearly 30% on Friday after the cloud software giant announced a $750 million investment from Bain Capital to "support the company's growth initiatives."
  • Nutanix CEO and co-founder Dheeraj Pandey also announced that he will retire as soon as his successor is named.
  • "There is no better time for me to make this transition to a new leader who can guide Nutanix through its next decade of growth and success," Pandey said in a statement.
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Nutanix shares soared nearly 30% on Friday after the cloud infrastructure company company posted upbeat results and announced a $750 million investment from Bain Capital.

The enterprise software giant, currentl valued at some $5.6 billion, also announced that CEO and co-founder Dheeraj Pandey is retiring after leading the company since its 2009 launch.

"There is no better time for me to make this transition to a new leader who can guide Nutanix through its next decade of growth and success," Pandey said in a statement.

Nutanix posted a narrower fiscal fourth quarter loss of $185.3 million, and said its revenue rose 9% year-over-year to $328 million, results that beat Wall Street estimates. Investors also cheered the Bain Capital investment.

"Investors will breathe a big sigh of relief from both the solid quarterly results and the influx of cash that should assuage liquidity concerns," William Blair analyst Jason Ader told clients in a note.

Nutanix emerged as a major player in enterprise tech by providing software that makes it easier for businesses to manage their networks in the cloud and in private data centers. 

But the company has taken a hit from the coronavirus crisis and stiffer competition from VMware, the Dell-owned cloud software giant.

IDC President Crawford Del Prete said Nutanix's solid quarter and news of the Bain Capital investment "was a good time to announce the change."

"It's the start of a new chapter for the company," he told Business Insider. "They need to more effectively compete against VMware, and Bain will give them more financial options. This probably also requires new executive leadership to guide the company through its next phase, which could mean M & A or new partnerships."

Ader of William Blair praised Pandey for "building and evolving Nutanix into a market leader and billion-dollar-plus company."

But he also wrote: "We think the time feels right for a leadership change, especially as the company enters its second decade."

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