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    NTNX
    Earnings call· Apr 2026(Q3 FY26)

    Nutanix Q3 FY26 earnings call NTNX

    May 27, 2026 Source

    Executive summary

    Nutanix Q3 FY26 — Strong Bookings and Raised Full-Year Guidance

    Nutanix delivered a strong Q3 FY26, outperforming guided metrics with robust bookings and healthy new customer additions, leading to a raised full-year outlook. The company continues to navigate a dynamic environment marked by persistent server hardware supply chain challenges and geopolitical headwinds, which it addresses through product flexibility, including external storage support and public cloud deployment options. Strategic investments in AI and modern applications are expected to drive multi-year growth.

    Highlights

    5

    • Quarterly revenue of $703 million, above guidance range of $680 million to $690 million.

    • ARR grew 15% year-over-year to $2.43 billion.

    • Non-GAAP operating margin of 22.3%, higher than guided range of 16% to 17%.

    • Free cash flow of $197 million, representing a 28% margin.

    • Added over 700 new customers in Q3.

    Concerns

    3

    • Supply chain challenges continue to drive higher prices and longer lead times for server hardware, impacting customer budgets and revenue timing.

    • Middle East region business is more challenging, impacting Q4 outlook.

    • Net dollar-based retention rate (NRR) at 106%, impacted by delayed revenue recognition and increasing average ACV/ASPs of new logo transactions.

    Guidance & targets

    9
    CategoryTargetConfidence
    Q4 FY26 Revenue
    $725 million to $745 million
    high materiality
    High
    Q4 FY26 Non-GAAP Operating Margin
    21% to 23%
    high materiality
    High
    Q4 FY26 Fully Diluted Weighted Average Shares Outstanding
    approximately 292 million shares
    low materiality
    High
    FY26 Revenue
    $2.82 billion to $2.84 billion
    high materiality
    High
    FY26 Non-GAAP Operating Margin
    approximately 22.5%
    high materiality
    High
    FY26 Free Cash Flow
    $760 million to $780 million
    high materiality
    High
    FY26 Free Cash Flow Margin
    27%
    high materiality
    High
    FY26 TCV bookings expectations
    higher relative to our last earnings call
    medium materiality
    High
    Medium-term Revenue and ARR Growth
    mid- to high teens
    high materiality
    Medium

    Operational metrics

    14
    Non-GAAP Gross Margin
    87.8%
    Q3 FY26

    Reported for the third quarter.

    Non-GAAP Operating Margin
    22.3%Higher than guided range of 16% to 17%
    Q3 FY26

    Higher due to lower operating expenses related to timing of hiring and higher revenue.

    Non-GAAP Net Income
    $136 million
    Q3 FY26

    Reported for the third quarter.

    Fully Diluted EPS (non-GAAP)
    $0.47
    Q3 FY26

    Based on approximately 287 million shares.

    Fully Diluted Weighted Average Shares Outstanding
    approximately 287 million shares
    Q3 FY26

    Used for Q3 FY26 EPS calculation.

    GAAP Net Income
    $72 million
    Q3 FY26

    Reported for the third quarter.

    Fully Diluted GAAP EPS
    $0.25
    Q3 FY26

    Reported for the third quarter.

    Free Cash Flow Margin
    28%
    Q3 FY26

    Reported for the third quarter.

    Cash, Cash Equivalents and Short-Term Investments
    $2.018 billionUp from $1.874 billion at the end of Q2
    End of Q3 FY26

    Balance sheet item.

    Share Repurchase Authorization Increase
    $750 million
    Q3 FY26

    Board increased existing share repurchase authorization.

    Shares Repurchased
    $50 million
    Q3 FY26

    Repurchased under existing authorization.

    Cash Used for RSU Tax Liability
    $32 million
    Q3 FY26

    Used to retire shares related to employees' tax liability for quarterly RSU vesting.

    Average Contract Duration
    3.4 yearsSlightly higher than expectations
    Q3 FY26

    Higher due to a mix of larger and longer duration transactions.

    TCV Bookings Growth
    over 20%YoY
    Q3 FY26

    Strong bookings performance.

    Industry KPIs

    8
    MetricValueDetails
    Revenue growth$703MUSD
    Arr net new arr$2.435BUSD
    Rpo current rpoStrong
    Bookings billingsStrong
    Customer account count700+customers
    Operating FCF margin rule of 4022.3%%
    Ai product adoption monetizationGood traction
    Net revenue net dollar retention106%%

    Orderbook & backlog

    2
    Annual Recurring Revenue (ARR)$2.435 billionEnd of Q3 FY26

    15% YoY growth

    Total Contract Value (TCV) BookingsStrongQ3 FY26

    over 20% YoY growth

    Underlying demand, will translate into revenue over time.

    Product announcements

    4
    ProductTypeDetails
    Nutanix Agentic AIlaunch
    Agentic AI solution for neocloudsexpansion
    NKP metallaunch
    External storage support with NetApp and Lenovoexpansion

    Deals & partnerships

    3
    AMDpartnership

    Partnership to support AMD's GPU solutions for Nutanix Agentic AI.

    NetApppartnership

    Partnership to support NetApp's storage platforms for external storage integration with Nutanix Cloud Platform.

    Lenovopartnership

    Partnership to support Lenovo's storage platforms for external storage integration with Nutanix Cloud Platform.

    Risks & headwinds

    3
    Server hardware supply chain challengesContinuing in fiscal Q4 and into fiscal year '27

    Higher prices and generally longer lead times

    Mitigation: Offering customer choice of server vendors, external storage options, and public cloud deployment (NC2) to manage deployment timelines and budgets.

    Middle East regional business challengesQ4 FY26

    Mid-single-digit percent of revenue; conducting new business more challenging

    Mitigation: Factored into Q4 outlook, taking a prudent approach.

    Net Dollar Retention (NRR) headwindsQ3 FY26

    NRR at 106%

    Mitigation: Impacted by delayed revenue recognition and increasing average ACV/ASPs of new logo transactions; focus on driving adoption and expansion within the customer base.

    Q&A highlights

    6

    Are customers better equipped to manage supply chain issues, and does this lead to smoother deal conversion for Nutanix?

    Customers are more aware and adapting, and Nutanix helps by offering choices like server vendors, external storage, and public cloud solutions (NC2). Hardware prices remain elevated, while lead times vary by vendor. This flexibility helps customers navigate the environment.

    “customers are much more aware of the situation and are better navigating the situation. And we are also helping them with that.”

    asked by Matthew Martino · answered by Rajiv Ramaswami

    2 min read5 chapters

    Detailed Narrative

    01

    Hybrid Cloud and AI Demand

    Nutanix continues to experience healthy demand for its solutions, driven by businesses modernizing IT footprints, adopting hybrid cloud operating models, and deploying cloud-native applications, including AI. A notable win with an aerospace defense supplier in APJ involved using Nutanix Kubernetes Platform (NKP) for container-based applications, Nutanix Database Service for automation, and Nutanix Unified Storage for unstructured data, alongside existing VM-based applications.

    02

    External Storage Strategy and Partnerships

    The company's focus on supporting external storage platforms is simplifying migrations for customers with existing data center infrastructure based on external storage and legacy hypervisors. This strategy allows customers to adopt the Nutanix Cloud Platform without significant hardware changes, mitigating supply chain impact🌐s. Key wins included a 7-figure deal with a healthcare provider retaining EverPure flash array and a financial services provider using Dell PowerFlex arrays. New partnerships with NetApp and Lenovo for external storage platforms were announced at .NEXT, with availability expected within the calendar year.

    03

    NC2 and Public Cloud Adoption

    Uptake of Nutanix Cloud Clusters (NC2) for public cloud deployment saw a notable quarter-over-quarter increase in customer wins and cores deployed. This acceleration is partly driven by customers facing longer lead times and higher prices for on-premises server hardware. Examples include a Fortune 500 financial services provider deploying NC2 on AWS and an EMEA-based outsourcing provider using NC2 on OVH public cloud, with plans to migrate production workloads back on-prem later.

    04

    Product Innovation and AI Offerings

    Nutanix made several important product announcements, including Nutanix Agentic AI, a full-stack software solution designed to reduce complexity and optimize performance for agentic AI applications. Initially supporting NVIDIA GPUs, it will also support AMD's GPU solutions. Enhancements for neoclouds are anticipated in H2 2026. The company also introduced NKP metal, extending automated lifecycle management to bare metal Kubernetes, further expanding its cloud-native capabilities.

    05

    Supply Chain Headwinds and Mitigation

    The environment remains dynamic, with supply chain challenges🌐 continuing to drive higher prices and longer lead times for server hardware, pressuring customer budgets and timelines. Nutanix mitigates this impact by offering customer choice in server vendors, external storage options, and public cloud deployment via NC2, enabling better management of deployment timelines and budgets. Hardware prices are expected to remain elevated into FY27.

    AI-generated summary of the company’s earnings call. Not investment advice.