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NTNX
Earnings call · Jul 2026 (Q4 FY26)

Nutanix Q4 FY26 earnings call NTNX

Aug 26, 2026 Source

Executive summary

Nutanix Q4 FY26 — Strong Finish Driven by External Storage, NC2, and AI Momentum

Nutanix concluded FY26 with robust performance across its business, driven by strong adoption of external storage solutions and NC2, alongside momentum in AI and cloud-native offerings. The company exceeded all guided metrics for the quarter and delivered its third consecutive year with a Rule of 40 score above 40. Management anticipates continued server supply chain constraints in FY27, which will influence payment flexibility and future start dates for software licenses.

Highlights

5

  • Reported record quarterly revenue of $757 million, exceeding the guided range of $725 million to $745 million.

  • Generated strong free cash flow of $278 million in Q4, yielding a 37% free cash flow margin.

  • Achieved a Rule of 40 score of 42% for fiscal year 2026, marking the third consecutive year above 40.

  • Ending ARR reached $2.549 billion, representing 16% year-over-year growth.

  • Saw strong uptake of external storage offerings and Nutanix Cloud Clusters (NC2), including several 7-figure ACV deals in Q4.

Concerns

5

  • Ongoing server supply chain challenges, including pricing and availability, are expected to continue through FY27.

  • Anticipate a moderately higher percentage of orders with future start dates in FY27 compared to FY26 due to server delays.

  • The renewal ACV cohort is expected to grow at a slower rate in FY27 compared to FY26 as the overall renewals base expands.

  • FY27 free cash flow guidance incorporates $33 million to $43 million in nonrecurring restructuring charges, with $30 million to $35 million paid in cash in Q1.

  • Offering more payment plan flexibility to customers in FY27 is expected to impact free cash flow, with a midpoint margin of 28%.

Guidance & targets

CategoryTargetConfidence
Revenue
$755M-$765M
high materiality
High
Non-GAAP Operating Margin
26%-28%
medium materiality
High
Fully Diluted Weighted Average Shares Outstanding
approximately 294 million shares
low materiality
High
Revenue
$3.18B-$3.23B
high materiality
High
Non-GAAP Operating Margin
24%-25%
medium materiality
High
Free Cash Flow
$850M-$950M
high materiality
High
Restructuring Charges (Nonrecurring)
$33M-$43M
medium materiality
High
Server Supply Constraints Impact
continue, moderately higher percentage of orders with future start dates
high materiality
High
Renewal ACV Cohort Growth
grow at a slower rate than in fiscal year '26
medium materiality
High
Payment Plan Flexibility
offer more payment plan flexibility
medium materiality
High

NTNX operating KPIs by quarter

NTNX operating KPIs stated on its earnings calls, by fiscal quarter
KPI Jan 2026 Q2 FY26 Apr 2026 Q3 FY26This call Jul 2026 Q4 FY26Change vs prior quarter
Annual recurring revenue (ARR) —
$2.435B ARR at the end of Q3 was $2.435 billion, representing year-over-year growth of 15%. Source transcript
$2.549B ARR at the end of Q4 was $2.549 billion. Source transcript
+4.7%
Net revenue retention rate
107% NRR, or net dollar-based retention rate at the end of Q2 was 107%. Source transcript
106% NRR, our net dollar-based retention rate at the end of Q3 was 106%. Source transcript
106% NRR or net dollar-based retention rate at the end of Q4 was 106%, flat quarter-over-quarter. Source transcript
0 pt
Average contract duration
3.1 years In Q2, average contract duration was 3.1 years, largely consistent with our expectations. Source transcript
3.4 years In Q3, average contract duration was 3.4 years, slightly higher than our expectations. Source transcript
3.3 years In Q4, average billings contract duration was 3.3 years, slightly lower than our expectations. Source transcript
-2.9%

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Ending ARR $2.549B Q4 FY26

16% YoY

Product announcements

ProductTypeDetails
Nutanix Agentic AIlaunch
Nutanix Agent Gatewaylaunch
Model Context Protocol Server for Nutanix Cloud Platformlaunch
Dell PowerStore Supportexpansion
Everpure Supportexpansion
NetApp Storage Platform Supportexpansion
Lenovo Storage Platform Supportexpansion

Deals & partnerships

AMD Strategic agreement for AI platform deployment and CPU support

Strategic agreement to deploy Nutanix Agentic AI platform on AMD's GPU solutions and broaden support for AMD CPUs, ensuring flexibility for customers.

Cronos Scale Partnership for neocloud market, deploying full Nutanix stack

Partnership representing early success in the neocloud market, deploying Nutanix Cloud Platform, NKP, and Agentic AI for GPU-based services to enterprise customers.

Dell Support for Dell PowerStore and PowerFlex external storage platforms

Added solutions supporting Dell PowerStore (GA earlier this month) and PowerFlex, allowing customers to utilize existing Dell storage arrays with Nutanix Cloud Platform.

Everpure Support for Everpure external storage platform

Added solutions supporting Everpure, which has been generally available for approximately 2 quarters, broadening external storage support.

NetApp Agreement to support NetApp storage platforms

Announced agreements to support NetApp's storage platforms, currently in limited availability, leading to significant deals in Q4.

Lenovo Agreement to support Lenovo storage platforms

Announced agreements to support Lenovo's storage platforms, broadening external storage support.

Risks & headwinds

Server Supply Chain Challenges FY27

Significant price increases in FY26; additional, potentially moderating, price increases and elevated lead times expected in FY27.

Mitigation:Providing flexibility with future start dates for software licenses; offering support for external storage and public cloud (NC2) to allow customers to use existing hardware or alternative deployment models; working closely with customers to navigate supply issues across various OEM vendors.

Revenue Recognition Impact from Future Start Dates FY27

Moderately higher percentage of orders with future start dates expected in FY27 compared to FY26.

Mitigation:Providing flexibility for customers to align software license start dates with server delivery timing; offering phased migrations for larger customers.

Slower Renewal ACV Cohort Growth FY27

Renewal ACV cohort expected to grow at a slower rate in FY27 compared to FY26.

Mitigation:Not explicitly stated, but implies focus on land and expand, and new growth vectors like external storage and AI.

Restructuring Charges Impact on Free Cash Flow FY27, Q1 FY27

$33M-$43M nonrecurring charges in FY27, with $30M-$35M cash paid in Q1 FY27.

Mitigation:Reinvesting the majority of savings from restructuring into high-growth areas (Agentic AI, cloud-native, sales coverage, digital sovereignty) to drive future returns.

Impact of Payment Flexibility on Free Cash Flow FY27

FY27 free cash flow guidance implies a 28% margin at the midpoint, incorporating increased payment flexibility.

Mitigation:Offering more payment plan flexibility (third-party financing or annual payment structures) to provide customers with purchasing flexibility, which is factored into FCF guidance.

What to watch in Q1 FY27

FY27 Revenue Growth

FY27
Current FY26 12% YoY
Target FY27 midpoint 12% YoY

Why it matters

This is the core top-line growth metric, indicating overall business health and execution against macro and supply chain headwinds.

Our initial fiscal year '27 guidance is as follows: revenue of $3.18 billion to $3.23 billion, representing a year-over-year growth rate of 12% at the midpoint of the range

Q&A highlights

What are the underlying assumptions for the FY27 growth guidance, considering the healthy bookings, hardware constraints, and potential conversion of delayed activity?

Management cited core platform demand, external storage, cloud-native/AI offerings, and partner ecosystem as key growth drivers. They acknowledged ongoing server supply chain challenges (pricing and availability) are expected to continue, leading to more future start dates and phased migrations. They also noted slower growth in the renewal ACV cohort.

“we believe that the ongoing supply chain challenges that our customers are facing with respect to both pricing and availability of servers on which on our software will continue and continue into fiscal year '27, which could impact customers' decisions on size and the timing of their projects with us.”

asked by Matthew Martino · answered by Rukmini Sivaraman

2 min read 6 chapters

Detailed narrative

Q4 FY26 Performance Highlights

Nutanix reported record quarterly revenue of $757 million, exceeding its guided range of $725 million to $745 million. ARR at the end of Q4 was $2.549 billion, representing 16% year-over-year growth. The non-GAAP operating margin reached 26.2%, surpassing the guided range of 21% to 23%, driven by lower operating expenses and higher revenue. Free cash flow in Q4 was strong at $278 million, yielding a 37% free cash flow margin.

Full Year FY26 Achievements

For the full fiscal year 2026, Nutanix delivered revenue of $2.854 billion, up 12% year-over-year, and ARR grew 16% year-over-year. The company added over 3,000 new customers, including Global 2000 accounts. Free cash flow for FY26 was $841 million, resulting in a 29% free cash flow margin. Nutanix achieved a Rule of 40 score of 42% for the third consecutive year, demonstrating a focus on sustainable, profitable growth.

AI Product and Partnership Progress

Nutanix made tangible progress on its AI initiatives, launching Nutanix Agentic AI, a full-stack software solution for optimizing AI applications. Strategic partnerships were expanded with AMD to deploy the Agentic AI platform on AMD's GPU solutions and broaden CPU support, complementing existing NVIDIA integrations. New capabilities like Nutanix Agent Gateway for unified governance and cost control over AI spend, and a model context protocol server for secure natural language AI automation in hybrid multi-cloud environments, were also announced.

External Storage and NC2 Momentum

The company saw strong momentum with its external storage offerings, including a sharp quarter-over-quarter increase in bookings and several 7-figure ACV deals. Solutions supporting Dell PowerStore and Everpure became generally available, and agreements were announced to support NetApp and Lenovo's storage platforms. Nutanix Cloud Clusters (NC2) also showed continued momentum with increased bookings and cores deployed, providing customers with flexibility to adopt the platform amidst supply chain constraints.

Strategic Wins and Customer Adoption

Key wins in Q4 included a new Global 2000 aerospace provider adopting Nutanix Cloud Platform with existing NetApp storage, and a North American hospital system choosing Nutanix with Dell PowerFlex. A Global 2000 financial services provider expanded its use of Nutanix Kubernetes platform and database service. NC2 secured a 7-figure expansion with a financial services firm and a new logo with an EMEA automotive technology provider, highlighting the appeal of hybrid multi-cloud and modern application solutions.

FY27 Outlook and Strategic Investments

Nutanix's initial FY27 guidance reflects continued investment in key growth areas such as Agentic AI, cloud-native offerings, and expanding sales coverage. These investments are partly funded by savings from a recent restructuring that impacted approximately 5% of the global workforce. The company aims to drive continued operating margin expansion while navigating persistent server supply chain constraints and offering increased payment flexibility to customers.

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