Nutanix, Inc. Q1 FY2026 earnings call

Key Points

• Solid demand with bookings slightly ahead of expectations, but revenue shifted due to future start dates.
• ARR grew 18% to $2.28 billion, with healthy new logo additions and solid free cash flow.
• Notable wins included a North American agribusiness, European government agency, EMEA energy provider, and US federal agency, showcasing the appeal of Nutanix's solution for modernizing IT, deploying apps/AI, and hybrid multi-cloud.
• Progress with external storage support, including announcing support for Dell PowerStore and continued work with Pure Storage. Nutanix was named a leader in the 2025 Gartner Magic Quadrant for Distributed Hybrid Infrastructure.

In the first quarter, Nutanix reported quarterly revenue of $671 million within the guided range. ARR grew 18% year over year to $2.28 billion. NRR at the end of Q1 was 109%, flat quarter over quarter. Non-GAAP gross margin in Q1 was 88%, non-GAAP operating margin was 19.7%, non-GAAP net income was $121 million, and free cash flow was $175 million with a margin of 26%.

Q2 2026

• Revenue guidance: $705 to $715 million
• Non-GAAP operating margin guidance: 20.5% to 21.5%

FY 2026

• Revenue guidance: $2.82 billion to $2.86 billion (12% y/y at midpoint)
• Non-GAAP operating margin guidance: 21% to 22%
• Free cash flow guidance: $800 million to $840 million (increase from prior)
• Timing of revenue recognition affected by customer-requested future start dates, growing OEM partnerships, and seasonality.

• Supply chain tightness potentially causing component shortages and longer lead times.
• Uncertainty in US Fed business due to personnel changes, policy shifts, and government shutdowns.
• Competitive dynamics and potential impact on market share for Nutanix's solutions.

Q: On NRR and US Fed business performance A: Simran asked about NRR and US Fed. Rukmini said NRR stabilized at 109% q/q flat and discussed US Fed business having double-digit y/y growth but expected variability due to recent changes Q: On revenue slippage and timing A: Matt asked about revenue slipping and evidence of timing only. Rukmini explained revenue shift was due to orders with future start dates and OEM shipment timing, with bookings remaining unchanged Q: On VMware migrations and market share A: Nehal asked about Nutanix's market share in VMware migrations. Rajiv said it's hard to quantify but Nutanix is winning significant migrations with large customers Q: On upfront pricing and hardware A: Jason asked about upfront pricing and hardware. Rajiv discussed being competitive with Broadcom, working to support existing hardware, and TCO benefits of moving to Nutanix