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]

Nutanix Conference Call Summary Company Overview - **Company**: Nutanix - **Industry**: Infrastructure Software - **Revenue**: Approximately $2.5 billion to $3 billion annually [8] Key Points and Arguments Company Background - Nutanix is an infrastructure software company that provides a hyper-converged infrastructure (HCI) solution, which simplifies IT management by converging compute, networking, and storage into a single architecture [4][5] - The company has maintained a customer net promoter score (NPS) of over 90 for more than a decade, indicating high customer satisfaction [8] Market Dynamics - The HCI market is still growing, with opportunities to modernize legacy three-tier architectures [6] - Nutanix has expanded its portfolio to support applications running on public cloud, bare metal, and edge locations, as well as both virtual machine-based and containerized applications [7] Customer Adoption Challenges - Customer inertia and existing hardware depreciation cycles are significant barriers to adopting HCI solutions [11][13] - Some customers may delay adoption due to recent hardware investments, leading to timing issues in transitioning to Nutanix's solutions [13] External Storage Support - Nutanix has recently begun supporting external storage solutions, such as Dell PowerFlex and Pure Storage, to address customer needs and facilitate quicker migrations from legacy systems [14][18] - This decision was influenced by market changes, particularly Broadcom's acquisition of VMware, which forced customers to consider alternatives [19][20] Financial Performance and Guidance - In the most recent quarter, bookings exceeded expectations, but revenue was impacted by an increase in orders with future start dates, which delays revenue recognition [37][40] - The company has adjusted its full-year guidance to account for ongoing future start date dynamics and potential supply chain issues [41][42] AI and Product Development - Nutanix is in the early stages of deploying its AI solutions, including "GPT-in-a-Box," which allows customers to build and run AI applications efficiently [31][34] - The company believes it is well-positioned to support customers transitioning to cloud-native applications as they explore AI opportunities [34] Capital Allocation Strategy - Nutanix has initiated an accelerated share repurchase (ASR) program to take advantage of its strong balance sheet and current stock price dislocation [59][60] - The company is also open to acquisitions that align with its strategic goals, having previously acquired D2IQ to enhance its cloud-native capabilities [63] Renewal and New Logo Strategy - Nutanix has a dedicated renewals team to focus on maintaining existing customer relationships while also pursuing new logo acquisitions [55][56] - The company incentivizes sales teams to convert new logos, recognizing the additional effort required compared to expanding existing accounts [57][58] Additional Important Insights - The company is monitoring supply chain dynamics closely, particularly around memory and server prices, which could impact future operations [42][44] - Nutanix's approach to customer engagement emphasizes flexibility and responsiveness to customer needs, particularly in the context of transitioning from legacy systems to modern architectures [22][23]

Core Insights - Nutanix has announced enhancements to its Nutanix Cloud Platform (NCP) aimed at providing organizations with greater flexibility in deploying and managing infrastructure across distributed environments, including traditional, modern, and AI applications [1][3][4] Group 1: New Capabilities and Features - The new capabilities in NCP allow customers to run and govern infrastructure across their own environments and with cloud providers offering sovereign services, enhancing focus on resilience, security, and control [3][4] - NCP now supports orchestrated lifecycle management of multiple dark-site environments and on-premises deployment options for governance and control planes, enhancing security and management [5] - The Nutanix Government Cloud Clusters (GC2) solution on AWS is now available, enabling federal agencies to build and operate a distributed sovereign cloud while maintaining orchestration within their environment [6] Group 2: Security and Compliance - NCP on Azure and AWS has successfully completed its annual SOC 2 Type 2 audit and renewed several ISO certifications, providing independent validation of its security and compliance controls [8] - The Nutanix Kubernetes Platform (NKP) will include a FIPS 140-3–validated and STIG-compliant Ubuntu Pro image option, catering to organizations with strict security requirements [9] - Enhanced security features in the Nutanix Enterprise AI (NAI) solutions include stronger identity integration and fine-grained access controls for AI models [11] Group 3: Resilience and Disaster Recovery - New capabilities in NCP enhance resilience by ensuring application availability across sites and regions during outages, crucial for sovereignty-aligned environments [12] - Organizations can now apply tiered disaster recovery options that match protection levels to each workload, ensuring business continuity even during multiple site failures [13][14] Group 4: Management and Operational Efficiency - NCP offers stronger management capabilities that streamline deployment and operation of distributed environments, providing consistent control across various sites and cloud providers [15][16] - The introduction of Nutanix Infrastructure Manager simplifies deployments using validated design patterns, making it easier to maintain data center environments [15] Group 5: Customer and Industry Perspectives - Customers like LFB Group emphasize the importance of data sovereignty and compliance, highlighting how Nutanix Cloud Clusters on OVHcloud help modernize infrastructure while ensuring data security [18] - Industry leaders recognize the growing priority of distributed sovereign cloud architectures, noting Nutanix's role in operationalizing these frameworks to assist with compliance and governance needs [20][21]

Q4 FY2025 Earnings August 27, 2025 2 Safe Harbor Forward Looking Statements This presentation contains express and implied forward-looking statements, including, but not limited to, statements regarding: our business momentum and prospects, including our continued innovation across our cloud platform, including modern applications and AI; our first quarter fiscal 2026 outlook; and our fiscal 2026 outlook. Safe Harbor Non-GAAP Financial Measures and Other Key Performance Measures To supplement our consolidat ...

Core Insights - Nutanix reported an 18% year-over-year revenue growth for fiscal year 2025, reaching $2.54 billion, alongside strong free cash flow generation of $750.2 million [3][4][7]. Financial Performance - Fourth Quarter Fiscal 2025: - Revenue was $653.3 million, a 19% increase from $548.0 million in Q4 FY'24 [4]. - Annual Recurring Revenue (ARR) reached $2.22 billion, up 17% from $1.91 billion [4]. - GAAP Gross Margin improved to 87.2%, up from 85.2% [4]. - Non-GAAP Operating Income was $119.5 million, compared to $70.5 million in the previous year [4]. - Free Cash Flow for the quarter was $207.8 million, down from $224.3 million [4]. - Fiscal Year 2025: - Total revenue was $2.54 billion, an 18% increase from $2.15 billion in FY'24 [4]. - GAAP Operating Income increased significantly to $172.5 million from $7.6 million [4]. - Non-GAAP Operating Margin improved to 21.1%, up from 16.2% [4]. - Net Cash Provided by Operating Activities was $821.5 million, compared to $672.9 million in FY'24 [4]. Strategic Developments - The company added over 2,700 new customers during the fiscal year [3]. - Nutanix signed new or enhanced partnerships with major players including AWS, Pure Storage, NVIDIA, and Google [3]. - The company was recognized as a Leader in The Forrester Wave™ for Multicloud Container Platforms and as a Challenger in the 2025 Gartner Magic Quadrant for Container Management [5][6]. Future Outlook - For Q1 Fiscal 2026, Nutanix expects revenue between $670 million and $680 million, with a Non-GAAP Operating Margin of 19.5% to 20.5% [7]. - For Fiscal 2026, the revenue outlook is projected to be between $2.90 billion and $2.94 billion, with a Non-GAAP Operating Margin of 21% to 22% [7].

Core Insights - Nutanix has been recognized as a Challenger in the 2025 Gartner Magic Quadrant for Container Management, marking its first appearance in this quadrant following the launch of its Nutanix Kubernetes Platform (NKP) solution [1][3] Company Developments - The launch of NKP was facilitated by the integration of D2iQ, Inc.'s Kubernetes Platform, allowing Nutanix to provide a production-ready enterprise solution for managing cloud-native applications across various environments [2] - Nutanix's NKP enables customers to run both modern and traditional applications on a unified platform, whether in their datacenter, at the edge, or in public clouds [2][3] Customer Use Cases - Notable customers, such as a leading North American financial services firm and Karnataka Bank in India, are utilizing NKP to enhance their application management and innovation capabilities [3][4] - Karnataka Bank is running critical business applications, including a cloud-native digital currency application required by the Reserve Bank of India, on the Nutanix Cloud Platform (NCP) [4][5] Product Innovation - Nutanix has introduced its Cloud Native AOS solution, extending enterprise storage and advanced data services to hyperscaler Kubernetes services and bare metal cloud-native environments without requiring a hypervisor [5]

Core Insights - Nutanix has been recognized as a Leader in The Forrester Wave™: Multicloud Container Platforms, Q3 2025, marking its debut in this report following the launch of the Nutanix Kubernetes Platform (NKP) [1][3] - The NKP launch was preceded by Nutanix's acquisition of D2iQ, Inc.'s Kubernetes Platform, enhancing its ability to manage cloud-native applications across various environments [2][3] - Nutanix's Cloud Native AOS solution, which extends enterprise storage and data services to hyperscaler Kubernetes services, is now available globally [2] Product and Innovation - The Forrester report highlights Nutanix's revitalization of its Kubernetes efforts through D2iQ's leadership and funding, resulting in a unified platform that integrates data center, cloud, and edge [3] - Nutanix's NKP allows VMware users to transition virtual machines to Nutanix AHV and modernize with containers, enhancing its role in private and data center AI [3] - The NKP provides a complete, CNCF-compliant cloud-native stack, enabling platform engineering teams to manage Kubernetes clusters securely across on-premises, hybrid, and multicloud environments [3] Customer Impact - Customers using NKP can innovate more rapidly due to reduced operational complexity and simplified monitoring, facilitating container management at scale [3][4] - Nutanix has a global customer base for NKP, indicating widespread adoption and trust in its solutions [4]