Summary
Nutanix reported first quarter fiscal 2026 revenue of $670.6 million, up 13.5% from $591.0 million in the prior-year quarter. Gross margin was 87.0%, up from 86.0%. Operating income was $49.3 million, up from $27.3 million. Net income was $62.1 million, up from $29.9 million. Diluted EPS was $0.21, up from $0.10. Operating margin was 7.4%, up from 4.6%.
The cash and balance sheet metrics showed similar momentum. Operating cash flow was $196.8 million, up from $161.8 million. Capital expenditures were $22.3 million, up from $9.8 million. Deferred revenue was $2.17 billion, up from $1.89 billion. On a non-GAAP basis, gross margin was 88.0%, compared with 87.5%. Non-GAAP operating income was $131.8 million, compared with $118.2 million. Non-GAAP operating margin was 19.7%, compared with 20.0%. Non-GAAP operating expenses were $458.0 million, compared with $398.9 million. Free cash flow was $174.5 million, compared with $151.9 million.
Annual recurring revenue was $2.284 billion, up 18% from $1.943 billion. Average contract duration was 3.1 years, unchanged from 3.1 years. Net dollar-based retention was 109%, compared with 112%. The company ended the quarter with 29,930 end customers, compared with 27,160. Total billings were $708.1 million, compared with $591.4 million. Management highlighted several partnership and product items: Nutanix was named a Leader in the 2025 Gartner Magic Quadrant for Distributed Hybrid Infrastructure, it announced support for Dell PowerStore with general availability in summer 2026, and it expanded Microsoft Azure Virtual Desktop flexibility for hybrid environments. The Azure Virtual Desktop support is still under development. The company also added Greg Lavender to its board of directors effective September 17, 2025.
For the second quarter of fiscal 2026, Nutanix guided revenue to $705 million to $715 million and non-GAAP operating margin to 20.5% to 21.5%, with approximately 296 million diluted weighted average shares. For the full fiscal year 2026, it guided revenue to $2.82 billion to $2.86 billion, non-GAAP operating margin to 21% to 22%, and free cash flow to $800 million to $840 million. The company raised its free cash flow guidance for the full year. Management said some revenue shifted from the first quarter into future periods late in the quarter. It expects that revenue over time remains unchanged and has factored the dynamic into its second-quarter and updated full-year revenue guidance. Underlying demand and business fundamentals were described as unchanged. The company plans to keep investing in sales and marketing and research and development, which may raise expenses and pressure profitability in the near term.
Execution risks remain. Sales and marketing headcount grew 8%, R&D headcount grew 13%, and G&A headcount grew 9% from October 31, 2024 to October 31, 2025. New sales representatives typically become fully ramped around the start of their fourth quarter of employment. Larger deal opportunities take longer to close, involve more executive review, and have greater variability in timing and outcome. Nutanix relies on channel and OEM partners, which exposes it to supply chain delays. Macroeconomic and geopolitical conditions, including inflation, interest rates, tariffs, and changes in government spending, can affect customer buying patterns and pipeline conversion. The company also faces competition, including from public cloud infrastructure. Guidance carries uncertainty because projections and estimates are speculative. Nutanix also recorded a full valuation allowance against federal and state net operating losses. The One Big Beautiful Bill Act, signed July 4, 2025, repealed the amortization requirement under IRC Section 174, and the company determined there is no material impact on its fiscal 2026 financial statements.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $670.6M | $653.3M | +2.6% | $591.0M | +13.5% |
| Gross profit | $583.1M | $569.4M | +2.4% | $508.3M | +14.7% |
| Gross margin | 87.0% | 87.2% | -0.2 pp | 86.0% | +0.9 pp |
| Research & development | $187.5M | $193.7M | -3.2% | $174.0M | +7.8% |
| Sales & marketing | $285.2M | $281.3M | +1.4% | $253.4M | +12.6% |
| General & administrative | $61.1M | $63.3M | -3.5% | $53.7M | +13.7% |
| Total operating expenses | $533.8M | $538.2M | -0.8% | $481.0M | +11.0% |
| Operating income (loss) | $49.3M | $31.2M | +58.1% | $27.3M | +81.0% |
| Operating margin | 7.4% | 4.8% | +2.6 pp | 4.6% | +2.8 pp |
| Net income (loss) | $62.1M | $38.6M | +60.7% | $29.9M | +107.5% |
| Net margin | 9.3% | 5.9% | +3.3 pp | 5.1% | +4.2 pp |
| Diluted EPS | $0.21 | $0.13 | +$0.08 | $0.10 | +$0.11 |
| Customers | 29,000 | — | — | — | — |
| Net retention rate | 109.0% | 108.0% | +1.0 pp | — | — |
Risks
Net dollar-based retention rate (NRR) was 109% as of October 31, 2025, compared to 112% as of October 31, 2024, which may indicate reduced expansion or renewal within the existing customer base.
MD&A states the sales pipeline has evolved to include a higher mix of larger deal opportunities, which often take longer to close, involve greater competition, and have greater variability in timing, outcome and deal structure, which may adversely affect top-line results.
The company plans to continue investing in sales and marketing and expects overall sales and marketing expense to increase in the near term; new sales representatives typically become fully ramped around the start of their fourth quarter of employment, and focusing on major accounts and large deals may take longer and impact overall sales team productivity.
Macroeconomic conditions including inflation, fluctuations in interest rates, foreign currency fluctuations, tariffs or other trade restrictions, geopolitical issues, and changes in government policy or spending may adversely affect customer and partner buying patterns, sales cycles, pipeline conversion, and top-line growth expectations.
Reliance on manufacturers, including channel and OEM partners, to produce the hardware platforms on which the software runs exposes the company to supply chain delays that could impair timely service to end customers.
Because subscription term-based license revenue is generally recognized upfront, any reduction in total average contract duration would decrease upfront license revenue and could adversely affect revenue for the applicable period; total average contract duration was approximately 3.1 years for both the three months ended October 31, 2024 and 2025.
The subscription-based business model and product transitions may cause customer concerns or confusion regarding pricing over time, which can slow adoption and renewal rates among current and future customers.
SaaS KPIs
All quarters →Free Cash Flow
Annual Recurring Revenue (ARR)
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Average Contract Duration
Net Dollar-Based Retention Rate (NRR)
ARR Growth (YoY)
Current Remaining Performance Obligations (cRPO)
Summary, forecast, risks and KPIs are extracted from Nutanix, Inc.'s SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.