Nutanix (NasdaqGS:NTNX) Q2 2026 Earnings call February 25, 2026 04:30 PM ET Company ParticipantsRajiv Ramaswami - CEORich Valera - VP of Investor RelationsRukmini Sivaraman - CFOConference Call ParticipantsBen Bollin - Partner and Senior Equity Research AnalystBrandon Nispel - Director and Equity Research AnalystDan Bergstrom - Equity AnalystJames Fish - Managing Director and Senior Research AnalystMatthew Martino - VP and Software Equity Research AnalystMike Cikos - VP and Senior Equity Research AnalystNeh ...

Nutanix (NasdaqGS:NTNX) Q2 2026 Earnings call February 25, 2026 04:30 PM ET Company ParticipantsRajiv Ramaswami - CEORich Valera - VP of Investor RelationsRukmini Sivaraman - CFOConference Call ParticipantsBen Bollin - Partner and Senior Equity Research AnalystBrandon Nispel - Director and Equity Research AnalystDan Bergstrom - Equity AnalystJames Fish - Managing Director and Senior Research AnalystMatthew Martino - VP and Software Equity Research AnalystMike Cikos - VP and Senior Equity Research AnalystNeh ...

Financial Data and Key Metrics Changes - The company reported quarterly revenue of $723 million, exceeding the guidance range of $705 million to $715 million [5][14] - Annual Recurring Revenue (ARR) grew 16% year-over-year to $2.36 billion [5][14] - Non-GAAP gross margin was 88.6%, and non-GAAP operating margin was 26.2%, higher than the guided range of 20.5% to 21.5% [16][19] - Free cash flow for the quarter was $191 million, representing a free cash flow margin of 26% [17][19] Business Line Data and Key Metrics Changes - The company added over 1,000 new customers, marking the strongest quarterly new logo additions in eight years [5][14] - The average contract duration remained consistent at 3.1 years [16] - The net dollar-based retention rate (NRR) at the end of Q2 was 107% [14] Market Data and Key Metrics Changes - The company faced supply chain challenges, particularly with CPU and memory shortages, which began to impact operations more significantly in the latter half of Q2 [6][15] - The company noted that longer lead times for servers would affect near-term revenue and free cash flow [8][20] Company Strategy and Development Direction - The company announced a strategic partnership with AMD, focusing on developing a Nutanix-powered Agentic AI platform, with AMD investing $150 million in Nutanix common stock and funding up to $100 million for R&D [4][5] - The company aims to leverage AI as a significant long-term growth opportunity, providing a platform for enterprise applications [5][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic environment and the impact of supply chain challenges on revenue timing, but emphasized strong business fundamentals [9][19] - The company expects bookings growth for the full fiscal year to exceed prior expectations, despite delays in revenue recognition due to supply chain issues [19][20] Other Important Information - The company repurchased $333 million worth of common stock under its existing share repurchase authorization [17][19] - The updated guidance for fiscal year 2026 includes revenue of $2.8 billion to $2.84 billion and free cash flow of $745 million to $775 million [19][20] Q&A Session Summary Question: VMware Replacement Opportunity - Management indicated that the opportunity for VMware replacements remains strong, with continued customer additions and high hypervisor adoption [24][25] Question: Confidence in Q4 Upsell - Management expressed confidence in Q4 due to traditional strong performance in that quarter and growth in remaining performance obligations (RPO) [27][28] Question: RPO and Off-Balance Sheet Bookings - Management clarified that the growth in RPO was influenced by the exclusion of cancelable backlog, which remains a small portion of total RPO [33][34] Question: AMD Partnership Revenue Opportunity - The partnership with AMD aims to enhance the Nutanix software stack on AMD hardware, with revenue expected to start materializing in FY27 [80][82] Question: Supply Constraints Impact - Management noted that both CPU and memory shortages are significant challenges, with an unclear timeline for resolution [84][86]

News Highlights AMD and Nutanix sign multi-year agreement to accelerate adoption of Nutanix-powered agentic AI platform on AMD accelerated compute infrastructure for enterprise AI and service providers AMD to invest and fund up to $250 million in Nutanix shares, and R&D and go-to-market for integrated solutions Joint roadmap to integrate AMD ROCm™ and AMD Enterprise AI software into the Nutanix Cloud Platform and the Nutanix Kubernetes Platform using AMD EPYC™ CPUs and AMD Instinct™ GPUs with support from a ...

Core Viewpoint - Nutanix Inc (NASDAQ:NTNX) is identified as a promising large-cap stock under $100, with significant upside potential, currently showing a moderately bullish sentiment among analysts [1]. Group 1: Analyst Ratings and Price Targets - As of January 23, Nutanix has a median 1-year price target of $67.83, indicating over 58% upside potential for investors [1]. - Coverage from 14 analysts includes 10 Buy ratings and 4 Hold ratings, reflecting a generally positive outlook [1]. - Morgan Stanley analyst Sanjit Singh downgraded Nutanix from Overweight to Equal Weight, lowering the price target from $82 to $62 [2]. Group 2: Revenue and Growth Prospects - Nutanix's revenues exceeded $2.5 billion, showcasing the company's scalability and long-term attractiveness [3]. - Despite strong revenue figures, Singh anticipates diminishing growth prospects for Nutanix's topline by 2026, contributing to a more cautious sentiment [3]. Group 3: Company Overview - Nutanix is a provider of enterprise cloud computing services, offering solutions that facilitate workload portability and support hybrid multi-cloud infrastructure [4]. - The company's offerings include Nutanix Cloud Infrastructure, Nutanix Cloud Manager, and Unified Storage, primarily through subscription models [4].

Core Insights - Nutanix is positioned as a leading cloud software company, offering a unified cloud platform that integrates compute, storage, virtualization, and networking, catering to various data management needs across on-premises, public clouds, and edge locations [2][4] - The global cloud infrastructure market was valued at over $262.7 billion last year, with projections indicating it could reach $837.97 billion by 2034, reflecting a compound annual growth rate (CAGR) above 12% [4] - Nutanix reported a revenue of $670.58 million in fiscal 1Q26, marking a 13.5% increase year-over-year, although it fell short of forecasts by $6 million [7] - The company has over 29,000 customers, including major corporations like Home Depot and Intel, highlighting its strong market presence [6] Company Overview - Nutanix's platform simplifies operations, enhances performance, and maintains control, which are essential for enterprises of all sizes [1] - The company leverages HyperConverged Infrastructure (HCI) technology, providing flexibility, scalability, and resilience, making it suitable for all applications [2] - The shift towards hybrid and multi-cloud architectures is driving demand for next-generation infrastructure providers, which Nutanix is well-positioned to meet [5] Financial Performance - Nutanix's non-GAAP EPS for the last reported quarter was $0.41, aligning with expectations [7] - Analyst Param Singh from Oppenheimer maintains a bullish outlook on Nutanix, citing its potential to benefit from the industry's shift towards HCI and the opportunity to displace VMware [8] - The current share price of Nutanix is $47.8, with an average target price of $71.17, indicating a potential one-year gain of 32% [8] Market Trends - Enterprises are undergoing significant infrastructure overhauls, rethinking data storage and management strategies, which is reshaping IT budgets [5] - The increasing importance of secure and flexible data storage solutions is driven by the rapid expansion of AI technologies [12] - The demand for unstructured data storage for AI applications is expected to grow, benefiting companies like Nutanix and Pure Storage [15]

Financial Data and Key Metrics Changes - The company reported quarterly revenue of $671 million, representing a year-over-year growth rate of 13% and within the guided range of $670-$680 million [10][11] - Annual Recurring Revenue (ARR) grew 18% year over year to $2.284 billion [5][11] - Non-GAAP net income for Q1 was $121 million, translating to a fully diluted EPS of $0.41 per share [12] - Free cash flow in Q1 was $175 million, with a free cash flow margin of 26% [12] Business Line Data and Key Metrics Changes - The company experienced a shift in revenue recognition due to a higher proportion of bookings with future start dates, impacting Q1 revenue [10][11] - The average contract duration increased to 3.1 years [11] - Non-GAAP gross margin was reported at 88%, while non-GAAP operating margin was 19.7% [11] Market Data and Key Metrics Changes - The U.S. Federal business saw double-digit year-over-year growth, although it remains a small portion of total revenue [20][21] - The company continues to add large customers, including a significant new logo in the U.S. federal sector focused on AI and modernization [8][9] Company Strategy and Development Direction - The company is focused on modernizing IT infrastructures and adopting hybrid multi-cloud operating models [6][9] - There is an emphasis on flexibility in license start dates to align with customer adoption timelines, particularly in light of Broadcom migrations [14][58] - The company plans to support additional external storage solutions, enhancing its hybrid cloud capabilities [9] Management's Comments on Operating Environment and Future Outlook - Management noted that the fundamentals of the business remain strong despite the revenue timing issues [9][15] - The company expects to see more revenue deferred than previously planned, but the overall revenue recognized over time remains unchanged [10][14] - Management remains optimistic about the demand for their solutions and the potential for growth in the federal sector [20][21] Other Important Information - The company has raised its free cash flow guidance for the full year to $800-$840 million, reflecting a free cash flow margin of 28.9% at the midpoint [13][14] - The company is participating in several upcoming technology conferences, indicating ongoing engagement with investors [2] Q&A Session Summary Question: NRR flat quarter over quarter dynamics - Management explained that new logos do not directly affect NRR, and the stability in NRR reflects good retention and expansion dynamics [17][18] Question: Performance of U.S. Federal business - The U.S. Federal business experienced double-digit growth, but variability is expected due to recent changes in personnel and policies [20][21] Question: RPO bookings growth rate - Management clarified that RPO captures future revenue expectations and noted a year-over-year growth of 26% in RPO [26][28] Question: Supply chain issues and push-outs - Management indicated that supply chain constraints were not a significant factor in Q1 results, but they are monitoring potential impacts going forward [32][34] Question: Customer spending plans and hardware costs - Management has not seen a drop in demand despite rising hardware costs and is focused on providing flexibility to customers [45] Question: Structural changes in bookings - Management confirmed that the increase in bookings with future start dates is likely a structural change driven by customer needs for flexibility [58][61]

Financial Data and Key Metrics Changes - The company reported quarterly revenue of $671 million, representing a year-over-year growth rate of 13% and within the guided range of $670 million to $680 million [10][12] - Annual Recurring Revenue (ARR) grew 18% year-over-year to $2.284 billion [5][12] - Non-GAAP net income for Q1 was $121 million, translating to a fully diluted EPS of $0.41 per share [13] - Free cash flow in Q1 was $175 million, with a free cash flow margin of 26% [13] Business Line Data and Key Metrics Changes - The company experienced a shift in revenue recognition due to a larger-than-expected proportion of bookings with future start dates, impacting revenue timing but not overall revenue expectations [3][10] - Non-GAAP gross margin for Q1 was 88%, while non-GAAP operating margin was 19.7%, towards the lower end of the guided range [12] Market Data and Key Metrics Changes - The U.S. Federal business saw double-digit year-over-year growth, although it remains a small portion of total revenue [21] - The company continues to see strong demand for its cloud platform, with notable wins in various sectors including agriculture and government [6][7] Company Strategy and Development Direction - The company is focused on modernizing IT infrastructures and adopting hybrid multi-cloud operating models, which aligns with customer needs for flexibility [6][9] - There is an ongoing initiative to support external storage solutions, with plans to support Dell's PowerStore expected in summer 2026 [8][9] - The company aims to balance prudent investments for growth while expanding margins over time [16][61] Management's Comments on Operating Environment and Future Outlook - Management indicated that the fundamentals of the business remain healthy, with unchanged bookings growth expectations despite revenue timing shifts [4][9] - The company is optimistic about the U.S. Federal business benefiting from modernization efforts and lowering total cost of ownership [22] - Management acknowledged potential supply chain tightness impacting future business but emphasized that demand remains strong [35][36] Other Important Information - The company has raised its free cash flow guidance for the full year to $800 million to $840 million, reflecting a free cash flow margin of 28.9% at the midpoint [14][15] - The company plans to participate in several upcoming technology conferences, indicating ongoing engagement with investors [2] Q&A Session Summary Question: NRR dynamics and new logos versus expansions - Management explained that new logos do not directly affect NRR, and while average deal sizes for new logos have increased, this may lead to longer migration timelines for larger customers [18][20] Question: Performance of U.S. Federal business - The U.S. Federal business experienced double-digit growth in Q1, but variability is expected due to recent changes and the government shutdown [21][22] Question: RPO bookings growth rate - Management clarified that RPO captures future revenue expectations and noted a year-over-year growth of 26% in RPO for Q1 [28][30] Question: Supply chain issues and push-outs - Management indicated that while supply chain constraints were not a significant factor in Q1 results, they are monitoring potential impacts going forward [33][35] Question: Revenue guidance adjustments - The company provided updated revenue guidance for FY26, reflecting shifts in revenue recognition due to customer flexibility needs and increased third-party OEM business [14][15][49] Question: Competitive environment - Management stated that competitive dynamics remain unchanged, with no significant shifts in the competitive landscape [50][51] Question: Large deals pipeline - The company continues to see a healthy pipeline of large deals, with expectations for growth in revenue from third-party OEM partners [54][56]

Financial Data and Key Metrics Changes - In Q1 2026, the company reported quarterly revenue of $671 million, representing a year-over-year growth rate of 13% [10][12] - Annual Recurring Revenue (ARR) grew 18% year-over-year to $2.284 billion [11][12] - Non-GAAP net income for Q1 was $121 million, translating to a fully diluted EPS of $0.41 per share [12] - Free cash flow in Q1 was $175 million, with a free cash flow margin of 26% [12] Business Line Data and Key Metrics Changes - The company experienced solid demand across its cloud platform, with notable wins in various sectors, including agriculture and government [5][7] - The average contract duration in Q1 was 3.1 years, indicating a stable customer commitment [11] - Non-GAAP gross margin for Q1 was 88%, while non-GAAP operating margin was 19.7% [11][12] Market Data and Key Metrics Changes - The company noted a double-digit year-over-year growth in its US Federal business, which typically sees seasonal strength in Q1 [20] - The company is seeing a growing proportion of its business through third-party OEM partners, impacting revenue recognition timing [15][24] Company Strategy and Development Direction - The company is focused on modernizing IT infrastructures and adopting hybrid multi-cloud operating models, which aligns with customer needs [5][9] - The strategy includes enhancing partnerships with OEMs like Dell and Cisco, which is expected to grow over time [49] - The company aims to balance prudent investments for growth while expanding margins, reflected in its updated operating margin and free cash flow guidance [16][55] Management's Comments on Operating Environment and Future Outlook - Management indicated that the shift in revenue recognition is primarily a timing issue and does not reflect a change in overall demand [4][10] - The company remains optimistic about its business fundamentals, with unchanged bookings growth expectations and an increase in free cash flow guidance [14][15] - Management acknowledged potential supply chain challenges but emphasized that they do not currently see a drop in demand [40][31] Other Important Information - The company plans to support Dell's PowerStore with general availability expected in summer 2026 [9] - Nutanix was recognized as a leader in the 2025 Gartner Magic Quadrant for distributed hybrid infrastructure [9] Q&A Session Summary Question: Can you elaborate on the dynamics of NRR being flat quarter over quarter? - Management explained that new logos do not directly affect NRR, and the stability in NRR reflects good retention and expansion dynamics [18] Question: How did the US Federal business perform relative to expectations? - The US Federal business saw double-digit year-over-year growth, but variability is expected due to recent personnel and policy changes [20] Question: Why did RPO bookings only grow by 6% despite better-than-expected bookings? - Management clarified that RPO captures future revenue expectations and that the small decline in backlog is consistent with historical seasonality [23][25] Question: What is the impact of customer-requested future start dates on revenue? - Management indicated that the shift in revenue recognition is primarily due to the proportion of bookings with future start dates, not a decline in demand [34][35] Question: How does the company view the competitive landscape? - Management stated that the competitive dynamics remain unchanged, with no significant shifts in competitors or market conditions [42] Question: What percentage of revenue is coming from third-party OEM partners? - While specific percentages were not disclosed, management noted that revenue from OEM partners is growing and expected to continue [49] Question: Is there a risk that investing less now could hurt future revenue growth? - Management emphasized the importance of balancing investments for growth with maintaining margins, indicating confidence in future revenue despite current adjustments [55]

Core Insights - Investors are showing a bullish stance on Nutanix (NASDAQ: NTNX), with significant options trading activity indicating potential upcoming movements in the stock [1][2] - The overall sentiment among large traders is slightly bullish, with 53% bullish and 46% bearish positions noted [3] Options Activity - A total of 15 options trades were identified, with 14 being call options amounting to $1,174,517 and only 1 put option totaling $69,105 [3] - The predicted price range for Nutanix over the past quarter is between $55.0 and $70.0, based on the volume and open interest of the options contracts [4] Volume and Open Interest - An analysis of the volume and open interest for Nutanix's options over the last 30 days reveals significant interest in the $55.0 to $70.0 strike price range [5][6] Notable Options Trades - The largest options trades include a bullish call option with a strike price of $60.00, totaling $523.5K, and a bearish put option with a strike price of $55.00, totaling $69.1K [9] Company Overview - Nutanix Inc specializes in cloud software, providing a platform for running applications and managing data across various environments, including hybrid multicloud infrastructures [10] - The company operates on a subscription business model and generates significant revenue from the United States [10] Market Position - Recent expert ratings suggest a positive outlook for Nutanix, with an average target price of $84.0 and varying ratings from analysts, including an Overweight rating from JP Morgan and a revised Outperform rating from Oppenheimer [12][13] Current Stock Performance - As of the latest data, Nutanix's stock price is $59.02, reflecting a 1.2% increase, with a trading volume of 3,877,888 [15]