Nutanix’s growth momentum faces headwinds as traditional HCI and VMware‑migration‑driven expansion slows. It is shifting focus toward agentic‑AI systems and neocloud customers, supported by workforce layoffs.
For the quarter ending July 31, revenue hit $757.1 million, up 16% YoY and topping the $745 million high‑end guidance. Full‑year FY2026 revenue rose 12% YoY to $2.85 billion. Quarterly GAAP net income stood at $38.7 million, versus $1.27 billion a year earlier — the prior‑year figure was inflated by a one‑time $1.2 billion non‑cash tax benefit. Full‑year net income reached $188.37 million compared with last year’s $1.5 billion. Excluding the tax benefit, FY2025 net income was $327.1 million, representing a 42.4 % decline for FY2026.
CEO Rajiv Ramaswami commented on the fiscal‑2026 fourth quarter: “We delivered solid top‑ and bottom‑line results and added over 3,000 new customers. We expanded partnerships with AMD, Lenovo, NetApp and Nvidia, and advanced our cloud‑platform innovation, notably for AI and external‑storage support.”
Financial summary
‑ Gross margin: 86.0 % versus 87.2 % YoY
‑ Operating cash flow: $315.0 million vs $219.5 million YoY
‑ Free cash flow: $277.6 million vs $207.8 million YoY
‑ ARR: $2.55 billion, up 16 % YoY from $2.20 billion
Nutanix beat all quarterly guidance metrics and added 650 new customers for a total of 32,360.
William Blair analyst Jason Ader attributed revenue strength to large‑deal execution (average contract length 3.2 years, slightly higher YoY), robust bookings and rising adoption of newer offerings including external storage, NC2 and database management.
Nutanix posted a Rule of 40 score of 42, its third consecutive year above 40. Its 10‑year average NPS stands at 90.
Earlier this month Nutanix announced a 5 % workforce reduction, roughly 400 roles, intended to streamline organisation structures, lift operational agility and redirect resources to strategic growth priorities. The cuts are expected to be substantially completed by end‑October 2026.
Ader noted management views neoclouds as an incremental route for enterprise‑AI deployments. Ecosystem expansion will remain a fiscal‑2027 priority, with restructuring savings reinvested in sales capacity, partnerships and agentic‑AI adoption. Nutanix is also porting software to Arm processors to help customers lower hardware costs.
Next‑quarter revenue guidance is $760 million ±$5 million (13.3 % mid‑point YoY growth), below this quarter’s 16 %. Full‑year FY2027 guidance is $3.205 billion ±$25 million, a 12.5 % mid‑point increase.
Bootnote
Ader pointed to conservative assumptions built into the FY2027 outlook amid emerging new‑growth vectors:
‑ Persistent server‑supply constraints, longer lead‑times and hardware‑price hikes that may alter project sizing, timelines and drive more future‑start deals;
‑ Slower‑growing renewal‑ACV cohort as the renewal base expands;
‑ Reinvestment of most restructuring savings into go‑to‑market initiatives following the 5 % headcount reduction;
‑ Free‑cash‑flow pressure from around $38 million mid‑point restructuring charges ($32.5 million cash outlay in FY2027 Q1), plus expanded customer‑payment flexibility via annual‑payment plans and third‑party financing, though most customers still pay multi‑year sums upfront.
Beijing Qianxing Jietong Technology Co., Ltd.
Sandy Yang/Global Strategy Director
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Email: yangyd@qianxingdata.com
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