Nutanix Q4 Earnings Call Highlights

Nutanix exceeded its fiscal fourth-quarter guidance, reporting record revenue of $757 million, 16% year-over-year ARR growth to $2.549 billion, and a 26.2% non-GAAP operating margin. Fiscal 2026 free cash flow reached $841 million, with a 29% margin. Management highlighted strong demand for external storage integrations and Nutanix Cloud Clusters, which help customers manage hardware shortages and pricing pressures. Dell, Pure Storage and NetApp partnerships, along with cloud, database and AI offerings, are expected to drive fiscal 2027 growth. Nutanix projected fiscal 2027 revenue of $3.18 billion to $3.23 billion, while cautioning that server supply constraints and elevated hardware prices could delay customer projects. The company also plans to reinvest savings from a restructuring affecting about 5% of its workforce into AI, cloud-native products and other growth initiatives.

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.

Chief Executive Officer Rajiv Ramaswami said the company saw strong uptake for external storage offerings and Nutanix Cloud Clusters, or NC2, which he said are helping customers address hardware availability and pricing challenges. Nutanix also reported notable performance in its Kubernetes and database management products.

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.

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.