- Q4 Revenue Growth: Nutanix reported Q4 revenue of $653 million, up 19% YoY, exceeding the guided range of $635–$645 million.
- Full-Year Revenue & ARR: Fiscal 2025 revenue reached $2.54 billion (+18% YoY), with ARR at $2.22 billion (+17% YoY).
- Margin Expansion: Non-GAAP operating margin hit 18% in Q4, above the guided 15.5–16.5%, driven by higher gross margins and lower expenses.
- 2026 Guidance: Fiscal 2026 revenue guidance set at $2.9–$2.94 billion (+15% YoY midpoint), with free cash flow expected between $790M–$830M.
- Strategic Wins & Partnerships: Notable large deal in Germany and progress in Dell PowerFlex and PureStorage collaborations, targeting VMware replacement opportunities.
Guidance and Outlook
Nutanix provided guidance for Q1 2026, with revenue expected to be between $676 to $680 million, and non-GAAP operating margin of 19.5 to 20.5%. For fiscal year 2026, the company guided revenue to be between $2.9 to $2.94 billion, representing a year-over-year growth rate of 15% at the midpoint of the range. Non-GAAP operating margin is expected to be between 21 to 22%, and free cash flow is expected to be between $790 million to $830 million.
Valuation Metrics
Using the current stock price, the P/S Ratio is 7.07, and the EV/EBITDA ratio is 65.6. The Free Cash Flow Yield is 4.18%. These metrics indicate that the market is pricing in a certain level of growth and profitability for Nutanix.
Operational Highlights
Rajiv Ramaswamy noted that larger deals can be unpredictable in terms of when and how they will come out, but the company is seeing solid demand for its solutions. Rukmini Sivaraman explained that the average deal size of new logos has been increasing, which can be a headwind for growth rates of expansion within those customers. The company's partnership with PureStorage is on track to deliver a generally available release by the end of the calendar year.
Challenges and Opportunities
Rukmini Sivaraman addressed the net retention rate (NRR) being down a couple of points sequentially, explaining that NRR and net new ARR can be affected by the net impact of ARR contributions from deals booked in prior quarters and credited in the current quarter. Rajiv Ramaswamy discussed the VMware replacement opportunity, characterizing it as a multiyear journey, and noted that Broadcom's cease and desist letters to customers using VMware without support may open up incremental opportunities for Nutanix.