Technology Stocks

Pivotal Software, Inc. (NYSE:PVTL) Announces 30% Total Revenue Growth For The Third Quarter 2019 Fiscal Year

Pivotal Software, Inc. (NYSE:PVTL) has reported its 2019 financial results for the third quarter that concluded in November 2018. Pivotal indicated substantial revenue growth as well as an increase in the number of subscribers.

According to Pivotal CEO, Rob Mee, the company generated a healthy revenue increase in the third quarter of the year. The growth is attributed to Pivotal’s endeavor to deliver ground-breaking products across its portfolio which has been vital for the company in increasing the number of transactions with their customers as well as attracting new ones. Moving forward Pivotal is well positioning itself as a strategic player in the digital transformation which is going to attract organizations from various sectors. Although the company faces competitive markets, Mr. Mee believes that their exceptional Pivotal Cloud Foundry and Labs combination will enable them to stand out among customers as they focus on providing proven innovative models.

Q3 2019 financial results

In the third quarter of the 2019 fiscal year, Pivotal recorded a 53% increase in subscription year over year revenue which was $100.8 million. Equally their year over year total revenue showed a tremendous growth of 30% bringing the amount to $168.1 million.

Compared to the third quarter of last year where they had GAAP operating loss of $36.5 million, this financial year they had a GAAP loss of $35.9 million. However, Non-GAAP year over year loss managed to decrease from $25.0 million that was registered last year to $14.8 million.

The GAAP net loss for this year was $34.9 compared to the third quarter of the last financial year with GAAP net loss per share being $0.13 relative to the third quarter of last year when it was $0.57. Pivotal did not make much net non-GAAP losses this year with the company recording $13.8 million year over year loss compared to the same period last fiscal year when they had $27.9.

However, the company had a negative operating cash flow of $36.2 for the third quarter with cash, and cash equivalents being $664.8 as of the time of announcing the results.

Business progress

The third quarter showed improvement as the company managed to grow their customer subscriptions by 17% to 368 with the frequency of expansion being 150%.

Equally, it unveiled new features for its Pivotal Cloud Foundry that are focused on helping the company gain significant business result via their relentless delivery of premium software as well as the reduction of their operations. The added PAS 2.3  for enhanced support of their .NET framework and also the PKS 1.2 for the expansion of the multi-cloud support to include Kubernetes and AWS to improve compatibility with Google engine.

Q4 2019 fiscal year projection

Following the increase in revenue growth for the third quarter, the company expects the trend to continue in Q4. They are anticipating revenue from subscription to grow and range from $109.5 to $110.5 million. Equally, its total revenue is likely to increase to between $169 million and $171 million with the non-GAAP operational losses expected to decrease to around $25 to $26 million. Assuming that their outstanding weighted average shares are 264 million the company expects the net non-GAAP loss per share to be $0.1.

However, Pivotal is looking to grow its 2019 whole year subscription revenue to between $398 and $399 million thus taking their total income to around $657 to $659 million. They are also looking to decrease year over year non-GAAP operational losses to between $76.5 and &5.5 million while keeping the net loss per share at $0.32 to $0.31.

The forward-looking non-GAAP measures have however not been reconciled as compared to the GAAP measure because of the possible variability and reservations about incurring future expenditure.

Stock Movement

Pivotal shares have had a healthy increase in the past year with a 52-week range of $15.11-$31.24. The company has a market capitalisation of $4.11 billion with share volume of 4.2 million.

Currently the Pivotal stock has a quote of $15.6 with day’s range of $14.89-$15.78. The stock has not been doing well and it considered for long term investment which seems as a profitable option although in future this might be devalued.

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