Nutanix outlines $2.9B–$2.94B FY26 revenue target as Dell and Pure partnerships advance

Earnings Call Insights: Nutanix (NTNX) Q4 2025

MANAGEMENT VIEW

* Rajiv Ramaswami, President and CEO, stated that "our fourth quarter was a solid finish to our 2025 fiscal year," highlighting quarterly revenue of $653 million, a 19% year-over-year increase, and strong free cash flow generation. He underscored full-year fiscal 2025 revenue of $2.54 billion, up 18% year-over-year, and annual recurring revenue (ARR) of $2.22 billion, a 17% increase.
* Ramaswami emphasized strong new logo performance, noting "over 2,700 new customers, our highest in 4 years," and free cash flow of $750 million, up 26% year-over-year, with a free cash flow margin of 30%. He highlighted product and partnership developments, including the release of GPT-in-a-Box 2.0, deeper NVIDIA AI Enterprise integration, and hybrid multi-cloud support for Google Cloud in public preview.
* He reported the Nutanix Cloud Platform's new external storage support, particularly with Dell PowerFlex, and announced a partnership with Pure Storage for FlashArray, which "remains on track to be generally available by the end of this calendar year."
* Ramaswami cited customer wins such as Finanz Informatik, Germany's Savings Bank Finance Group IT provider, and a global financial services provider expanding their use of Nutanix's platform. He noted initial wins for the cloud platform with Dell PowerFlex at two Global 2000 companies and expressed optimism about customer interest in these offerings.
* CFO Rukmini Sivaraman stated, "Results in Q4 '25 were above the high end of our guidance range across all guided metrics," with quarterly revenue of $653 million and ARR at $2.223 billion. She reported non-GAAP gross margin of 88.3% and non-GAAP operating margin of 18%. Non-GAAP net income was $109 million or $0.37 per share, and free cash flow was $208 million, representing a margin of 32%.

OUTLOOK

* Sivaraman provided Q1 '26 guidance of revenue between $670 million and $680 million and non-GAAP operating margin of 19.5% to 20.5%. For fiscal year 2026, she gave initial guidance for revenue of $2.9 billion to $2.94 billion, representing a 15% year-over-year growth rate at the midpoint, and non-GAAP operating margin of 21% to 22%. Free cash flow is expected to be $790 million to $830 million, with a margin of 27.7% at the midpoint.
* She commented that Nutanix expects "continued uncertainty in the overall macro environment, including in areas such as U.S. federal government spending and with regard to currency fluctuations." The company anticipates "a slight year-over-year decline in aggregate average contract duration" and a "small but growing contribution to fiscal year '26 revenue" from the Dell PowerFlex solution.

FINANCIAL RESULTS

* Sivaraman reported that full-year fiscal 2025 revenue was $2.538 billion, higher than the most recent guidance, with a year-over-year growth rate of 18%. Non-GAAP operating margin for the year was 21.1%, and non-GAAP net income for the year was $476 million.
* She noted a "nice increase in the number of $1 million plus land-and-expand ACV transactions, more than a 60% increase in fiscal year '25 relative to fiscal year '24."
* Cash, cash equivalents, and short-term investments at quarter-end totaled $1.993 billion. The company repurchased $50 million in stock and used $44 million to retire shares related to RSU vesting tax liability.

Q&A

* Jason Noah Ader, William Blair: Asked about the size and repeatability of the FI win. Rajiv Ramaswami responded that FI is "a significant multiyear deal" and that while larger deals are "a bit more unpredictable," Nutanix has a pipeline of similar opportunities.
* Ader also asked about a sequential decline in NRR. Sivaraman explained, "our NRR and net new ARR...can be affected by the net impact of ARR contributions from deals that are booked in prior quarters...and ARR that's booked in the current quarter, but deferred to future periods." She noted headwinds from deal size and law of large numbers affecting NRR.
* Meta A. Marshall, Morgan Stanley: Sought clarification on Dell PowerFlex customer profile and Pure Storage early access. Ramaswami said PowerFlex is "for the top end of the pyramid," landing large Global 2000 customers, with the Pure Storage solution expected to contribute "over the next back half of the year."
* Marshall asked about U.S. federal business trends. Sivaraman stated, "some of the personnel changes and additional reviews...have resulted in longer deal cycles and some increased variability," but reiterated optimism due to platform modernization appeal.
* Matthew Vincent Martino, Goldman Sachs: Asked about enterprise AI maturity and revenue timing for large deals. Ramaswami said AI adoption is "still early days," but expects an inflection point "over the next couple of years." Sivaraman described visibility into license provisioning for large deals and assumptions embedded in FY26 guidance.
* James Edward Fish, Piper Sandler: Inquired about guidance components and ARR expectations. Sivaraman noted renewal cohort growth at a slower pace and clarified, "we don't guide to ARR."
* Additional questions covered guidance conservatism, contract duration, macro demand trends, competitive displacement, Pure partnership details, and margin drivers. Responses highlighted ongoing investment, product attach, and dynamic pricing.

SENTIMENT ANALYSIS

* Analyst tone was generally positive to neutral, focusing on details of large deals, contract dynamics, and guidance assumptions. Probing questions on NRR, contract duration, macro trends, and margin guidance reflected a desire for clarity on sustainability and growth levers.
* Management maintained a confident but measured tone in prepared remarks and Q&A. Phrases like "we are encouraged by these initial wins" and "we feel comfortable that all of that is embedded into the guidance" signaled confidence. When addressing variability in metrics or guidance, management provided detailed explanations and cited multiple moving pieces, occasionally noting the unpredictability of larger deals and macro factors.
* Compared to the previous quarter, both management and analysts maintained a similar tone, with slightly more focus on guidance assumptions and the potential impact of macroeconomic factors in the current call.

QUARTER-OVER-QUARTER COMPARISON

* The company raised its full-year guidance in the previous quarter and again delivered results above guidance in Q4. The Q4 call featured heightened emphasis on the contributions from new partnerships (Dell PowerFlex, Pure Storage) and early wins from these offerings.
* Guidance language in the current quarter includes more explicit discussion of uncertainties around macro environment, contract duration, and federal spending. There is also a shift toward highlighting the small but growing revenue contribution from new products and strategic partnerships.
* Key metrics such as revenue, ARR, free cash flow, and margin continued to improve, though management flagged a slower pace of renewal cohort growth and a potential slight decline in contract duration for FY26.
* Analyst questions in both quarters centered on deal dynamics, guidance, and competitive displacement. In Q4, analysts pressed more on the sustainability of margins and the timing of large deal recognition.

RISKS AND CONCERNS

* Management cited "continued uncertainty in the overall macro environment, including in areas such as U.S. federal government spending and with regard to currency fluctuations."
* Sivaraman noted a "slight year-over-year decline in aggregate average contract duration" expected in FY26, which could impact revenue and cash flow.
* Personnel changes and longer deal cycles in the U.S. federal business were highlighted as contributing to variability.
* Management acknowledged unpredictability in timing and size of larger deals and the impact of deferred license provisioning.
* Analyst concerns included the sustainability of margin improvement, the impact of contract duration, and the pace of new logo versus expansion growth.

FINAL TAKEAWAY

Nutanix finished fiscal 2025 with strong revenue and cash flow growth, exceeding guidance across all major metrics. The company is guiding for continued top-line and margin expansion in FY26, driven by product innovations, new partnerships with Dell and Pure Storage, and momentum in landing large enterprise customers. Management remains confident in Nutanix’s multiyear growth opportunity, while cautioning about macro uncertainty, evolving deal dynamics, and federal sector variability. Investors should note the company’s focus on sustaining growth through portfolio expansion and strategic collaborations as it targets a $2.9 billion to $2.94 billion revenue range for fiscal 2026.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/ntnx/earnings/transcripts]

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