Nutanix (NASDAQ:NTNX) reported fourth-quarter fiscal 2026 results above its guided ranges, citing broad-based demand for its hybrid multicloud platform, external storage support, public-cloud offering and portfolio products despite continued server supply constraints.
Fourth-quarter revenue reached a record $757 million, exceeding the company’s guidance of $725 million to $745 million. Annual recurring revenue, or ARR, totaled $2.549 billion at quarter-end, up 16% from a year earlier and representing an acceleration from the prior quarter’s growth rate. Net dollar-based retention remained at 106% sequentially.
Full-Year Growth and Profitability
For fiscal 2026, Nutanix reported revenue of $2.854 billion, up 12% year over year, and ARR of $2.549 billion, up 16%. The company added more than 3,000 customers during the year, including customers across its Global 2000, enterprise and other customer tiers.
Free cash flow for the year was $841 million, equal to a 29% free-cash-flow margin. Nutanix said its Rule of 40 score, calculated as revenue growth plus free-cash-flow margin, was 42%, marking its third consecutive year above 40.
Non-GAAP operating margin was 23.7% for the fiscal year, up about 2.6 percentage points from the prior year and above the company’s most recent outlook of approximately 22.5%. Non-GAAP net income was $597 million, or $2.04 per diluted share.
GAAP net income for fiscal 2026 was $1.507 billion, or $5.17 per diluted share. However, Chief Financial Officer Rukmini Sivaraman said the result included a one-time $1.2 billion income-tax benefit from the release of a valuation allowance related to U.S. deferred tax assets. Excluding that benefit, GAAP net income would have been $299 million, or $1.04 per diluted share.
In the fourth quarter, non-GAAP operating margin was 26.2%, above the company’s 21% to 23% guidance range. Sivaraman attributed the outperformance to revenue above expectations and lower operating expenses, including the timing of hiring. Fourth-quarter free cash flow totaled $278 million, or a 37% margin.
External Storage, NC2 and AI Initiatives
Management highlighted external storage support as an increasingly important avenue for customer adoption. Nutanix added support for Dell PowerStore, which became generally available earlier in the month, while support for Pure Storage’s FlashArray had been generally available for about two quarters. The company also announced agreements to support NetApp and Lenovo storage platforms.
Ramaswami said Nutanix’s NetApp integration remains in limited availability but helped secure several large deals in the fourth quarter. He said the company expects all three storage relationships — Dell, Pure Storage and NetApp — to be meaningful growth drivers in fiscal 2027.
The company described several seven-figure annual contract value wins involving external storage. These included a Global 2000 aerospace, defense and security customer that selected Nutanix Cloud Platform and Nutanix Cloud Manager while retaining its NetApp storage, as well as a North American hospital system that plans to use existing Dell PowerFlex arrays.
NC2 bookings and deployed cores also increased sharply from the prior quarter, according to management. One seven-figure expansion involved a North American financial-services customer planning to deploy Nutanix Database Service on NC2 running on Amazon Web Services. Nutanix also added an automotive technology customer in Europe that plans to use NC2 on OVHcloud.
The company continued to build its artificial intelligence portfolio during the year, including the launch of Nutanix Agentic AI, Agent Gateway and a Model Context Protocol server for Nutanix Cloud Platform. Nutanix also entered a strategic agreement with AMD to deploy its Agentic AI platform on AMD GPU solutions, complementing its existing NVIDIA integration.
Ramaswami said enterprise adoption of agentic AI remains in its early stages, though AI has become a topic of discussion with customers. He said demand for governance, cost controls and AI infrastructure is growing, while the company’s AI products are expanding from a small base.
Fiscal 2027 Outlook Reflects Supply Constraints
For the first quarter of fiscal 2027, Nutanix forecast revenue of $755 million to $765 million and non-GAAP operating margin of 26% to 28%.
For the full fiscal year, the company projected:
- Revenue of $3.18 billion to $3.23 billion, representing 12% growth at the midpoint.
- Non-GAAP operating margin of 24% to 25%.
- Free cash flow of $850 million to $950 million, representing a 28% margin at the midpoint.
Sivaraman said the outlook assumes server supply constraints and elevated hardware prices will persist through fiscal 2027, potentially affecting the timing and size of customer projects. Nutanix expects a moderately higher percentage of orders to carry future license start dates as customers await server deliveries, and it expects to continue accommodating phased migrations for larger customers.
Management said external storage and NC2 provide offsets to those challenges by enabling customers to move to Nutanix while retaining existing storage hardware or using public-cloud infrastructure. The company also expects cloud-native products, AI offerings, database services and its partner ecosystem to contribute to growth.
Nutanix’s fiscal 2027 outlook includes the impact of a restructuring announced earlier in the month that affected about 5% of its global workforce. The company expects restructuring charges of $33 million to $43 million, including $30 million to $35 million of cash payments in the first quarter. Sivaraman said Nutanix plans to reinvest most resulting savings into Agentic AI, cloud-native products, sales coverage, digital sovereignty investments and other growth areas.
The company also said it plans to offer customers more payment flexibility through third-party financing and annual payment structures. In fiscal 2026, annual-payment arrangements accounted for roughly a double-digit percentage of total contract value bookings, according to Sivaraman.
About Nutanix (NASDAQ:NTNX)
Nutanix, Inc is an enterprise cloud computing company that develops software to simplify the deployment and management of datacenter infrastructure. Founded in 2009 and headquartered in San Jose, California, Nutanix is best known for pioneering hyperconverged infrastructure (HCI), an approach that integrates compute, storage and virtualization into a single software-defined platform aimed at reducing complexity and operational overhead in private and hybrid cloud environments.
The company’s product portfolio centers on the Nutanix Cloud Platform, which includes its core AOS software for HCI, Prism for infrastructure management and automation, and a suite of additional services such as Calm for application automation, Files and Volumes for file and block services, Karbon for Kubernetes orchestration, and Era for database management.
