Hyperconverged infrastructure vendor Nutanix reported continued growth and increased profitability in its latest quarter, but forecast a slowdown due to sales push-outs.
Revenues in the first fiscal 2026 quarter ended October 31, 2025, were $670.6 million, a 13.4 percent annual increase, with a GAAP profit of $62.1 million, more than double the year-ago $19.9 million.
President and CEO Rajiv Ramaswami said: “We saw solid demand for our cloud platform in our first quarter, with bookings that were slightly ahead of our expectations, ARR growth of 18 percent year-over-year, another healthy quarter of new logo additions, and solid free cash flow performance.”
CFO Rukmini Sivaraman said: “Late in the quarter, we saw some revenue shift from Q1 into future periods. We expect that the revenue over time remains unchanged. We expect this dynamic to continue and have factored it in our Q2 and updated full-year revenue guidance.”
Financial summary
- Gross margin: 87 percent vs year-ago 86 percent
- Operating cash flow: $196.8 million vs year-ago $161.8 million
- Free cash flow: $174.5 million vs $151.9 million last year and up 15 percent
- Cash, cash equivalents & restricted cash: $780.4 million vs $716.9 million last year.
- Nutanix recruited 640 new customers, taking its total customer count to 29,930.
Nutanix is steadily expanding its partnerships and selling opportunities. Its Nutanix Cloud Platform (NCP) software will soon support Dell PowerStore external arrays, with general availability expected in summer 2026. NCP support of Microsoft Azure Virtual Desktop (AVD) for hybrid environments is in development. Ramaswami said in the earnings call: “We remain on track to deliver our solution supporting Pure Storage FlashArray within this calendar year.”
It noted that a growing proportion of its business comes through its third-party OEM partners, for which it only recognizes revenue when its partners ship an appliance. Consequently, it expects more revenue to shift from fiscal 2026 into future periods, while the total amount of revenue recognized over time remains unchanged. This delay is affecting its forecasts for revenues.
Ramaswami said: “Late in the quarter, we saw more business than expected with start dates outside of the quarter. This resulted in some revenue being shifted out of quarter one. As we evaluated the impact of this recent change in our business mix on our fiscal 2026 outlook, we now expect to see more revenue deferred than we had previously planned, driving a reduction in our full-year revenue guidance.”
Next quarter’s outlook is for revenues of $710 million ± $5 million, an 8.5 percent rise at the midpoint. This is slower growth than we have become accustomed to. The full FY 2026 revenue outlook is $2.84 billion ± $200 million, an 11.8 percent year-over-year rise. It had previously suggested the full-year revenues would be $2.92 billion ± $20 million. Its share price went down, from $58.77 to $49.00, after investors digested this forecast downgrade.
Comment
Although its business is affected by a slowdown, Nutanix’s overall revenue and profits momentum looks strong. Customers are sticking with it and buying more, while new customers are coming on board. This is a land-and-expand strategy exemplified. Nutanix is adding hybrid cloud and AI-relevant features and capabilities to keep its business growing. It’s still a tightly run ship going places.
