SEC Comment Letter for Nutanix, Inc. (NTNX) (CIK 0001618732) (NTNX) — Mar 9, 2018
Nutanix, Inc. (NTNX) (CIK 0001618732)
Date: March 9, 2018 · CIK: 0001618732 · Accession: 0000000000-18-007511
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File numbers found in text: 001-37883
Letter
Mail Stop 4561 March 9, 2018 Duston M. Williams Chief Financial Officer Nutanix, Inc. 1740 Technology Drive, Suite 150 San Jose, CA 95110
Re: Nutanix, Inc. Form 10 -K for the Fiscal Year E nded July 31, 2017 Filed September 18, 2017 Form 10 -Q for the Quarterly Period Ended October 31, 2017 Filed December 13, 2017 File No. 001-37883
Dear Mr. Williams :
We have li mited our review of your filing s to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional c omments.
Form 10 -Q for the Quarterly Period Ended October 31, 2017
Note 3. Revenue, Deferred Revenue and Deferred Commissions
Costs to obtain and ful fill a contract, page 16
1. You indicate that commission expenses that are incremental to obtaining customer contracts are capitalized and the deferred commission amounts are amortized based on the expected future revenue streams under the customer contracts. Since the majority of your product sales are sold in conjunction with PCS contracts, please clarify whether sales commissions are earned or allocated to different performance obligations in a contract and how the amortization period and expense reflects the transfer of the appli cable product and service. Refer to ASC 340 -40-35-1 and 340 -40-50-2(b).
Duston M. Williams Nutanix, Inc. March 9, 2018 Page 2
2. Please tell us, and disclose as appropriate, whether additional sales commissions are paid upon renewal of PCS contracts and, if so, whether such amounts are commensurate with the initial commissions. Further, if applicable, disclose how commissions paid for renewals are considered in your amortization period, which is based on the expected future revenue streams. Refer to ASC 340 -40-35-1 and 340 -40-50-2(b).
We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
You may contact Melissa Kindelan, Senior Staff Accountant , at (202) 551 -3564 or Christine Dietz, Assistant Chief Accountant, at (202) 551 -3408 if you have questions regarding comments on the financial statements and related matters. Please contact me at (202) 551 -3499 with any other questions.
Sincerely,
/s/ Kathleen Collins
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Mail Stop 4561 March 9, 2018 Duston M. Williams Chief Financial Officer Nutanix, Inc. 1740 Technology Drive, Suite 150 San Jose, CA 95110 Re: Nutanix, Inc. Form 10 -K for the Fiscal Year E nded July 31, 2017 Filed September 18, 2017 Form 10 -Q for the Quarterly Period Ended October 31, 2017 Filed December 13, 2017 File No. 001-37883 Dear Mr. Williams : We have li mited our review of your filing s to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional c omments. Form 10 -Q for the Quarterly Period Ended October 31, 2017 Note 3. Revenue, Deferred Revenue and Deferred Commissions Costs to obtain and ful fill a contract, page 16 1. You indicate that commission expenses that are incremental to obtaining customer contracts are capitalized and the deferred commission amounts are amortized based on the expected future revenue streams under the customer contracts. Since the majority of your product sales are sold in conjunction with PCS contracts, please clarify whether sales commissions are earned or allocated to different performance obligations in a contract and how the amortization period and expense reflects the transfer of the appli cable product and service. Refer to ASC 340 -40-35-1 and 340 -40-50-2(b). Duston M. Williams Nutanix, Inc. March 9, 2018 Page 2 2. Please tell us, and disclose as appropriate, whether additional sales commissions are paid upon renewal of PCS contracts and, if so, whether such amounts are commensurate with the initial commissions. Further, if applicable, disclose how commissions paid for renewals are considered in your amortization period, which is based on the expected future revenue streams. Refer to ASC 340 -40-35-1 and 340 -40-50-2(b). We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. You may contact Melissa Kindelan, Senior Staff Accountant , at (202) 551 -3564 or Christine Dietz, Assistant Chief Accountant, at (202) 551 -3408 if you have questions regarding comments on the financial statements and related matters. Please contact me at (202) 551 -3499 with any other questions. Sincerely, /s/ Kathleen Collins Kathleen Collins Accounting Branch Chief Office of Information Technologies and Services cc: Tyler Wall – Chief Legal Officer