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Nimble Storage Inc (NMBL) Crashes Following Incurring Loss in Q4

Shares of Nimble Storage Inc (NYSE:NMBL) crashed nearly 38% in after-hours trading yesterday following the company’s dismal quarterly results and soft view.

The company reported third quarter fiscal 2016 loss of 36 cents a share that was in line with the Zacks Consensus Estimate. In the prior-year quarter, the company had reported a loss of 39 cents per share.

The company reported non-GAAP loss of 14 cents a share, compared with the prior-year quarter loss of 15 cents per share. The loss was however wider than the previously projected range of a loss of 8 cents to 9 cents.

Quarterly Details

Despite increasing 37% year over year to $80.7 million, revenues fell short of the Zacks Consensus Estimate of 87.5 million. Revenues also came much below the company’s guided range of $86 million – $88 million.

The company’s revenues from products increased 28.3% to $65.6 million in the quarter, while the same from support and services business improved a robust 90.1% to $15.1 million.

The company’s gross margin was 66.9%, a decrease of 20 basis points (bps) from the year-ago quarter.  Lower margins from products completely offset the growth in support and services.

Nimble exited the quarter with cash and cash equivalents of $209.7 million, compared with $208.4 million as of Jan 31, 2015.

The company had a cash outflow of $3.1 million in the quarter compared with $6.5 million cash used in the prior-year quarter.


For the fourth quarter of fiscal 2016, the company expects revenues in the range of $87 million to $90 million. Non-GAAP operating loss is expected to be $8 to $10 million. Non-GAAP loss per share is projected to be in the range of 11 cents to 13 cents.


According to the company, the third quarter results were impacted by two primary factors- “First, we believe while we are acquiring large enterprise customers at a strong pace, our enterprise investments are taking longer to become fully productive. Second, we believe the shift in investment from commercial to enterprise business impacted our commercial revenue growth more than we anticipated.”

Nonetheless, management remains optimistic about the long-term prospects of these investments though the financials are likely to remain under pressure in the near term. The company believes that it is positioning itself well to benefit from the ongoing shift to flash-centric architectures from the conventional disk-centric architectures with its Adaptive Flash platform in the long term.

Currently, Nimble has a Zacks Rank #3 (Hold). But after the quarterly results, estimates will likely move downward, which could lead to a revision of its rank.

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