Summary
Nutanix reported second quarter fiscal 2025 results. Revenue was $654.7 million, up 15.8% year over year. Gross profit was $569.4 million, up 17.7%. Gross margin was 87.0%, up 1.4 percentage points. Operating income was $65.4 million, up 76.6%. Net income was $56.4 million, up 72.1%. Diluted EPS was $0.19, up 58.3%. For the first six months, revenue was $1.25 billion, up 15.7%, and net income was $86.4 million, up 409.7%. Deferred revenue was $2.02 billion, up 18.2%. Operating cash flow for the quarter was $221.7 million, up 18.9%. Capital expenditures were $34.6 million, up 45.6%.
The company's annual recurring revenue reached $2.06 billion, up 19%. Average contract duration was 3.0 years. Non-GAAP gross margin was 88.3%. Non-GAAP operating income was $161.3 million, and non-GAAP operating margin was 24.6%. Free cash flow was $187.1 million. Total billings were $776.4 million. Subscription billings were $733.7 million, professional services billings were $40.3 million, and other non-subscription product billings were $2.3 million. For the first six months, non-GAAP operating income was $279.5 million, non-GAAP operating margin was 22.4%, non-GAAP gross margin was 87.9%, non-GAAP operating expenses were $815.9 million, and free cash flow was $338.983 million. Nutanix ended the quarter with 27,870 end customers, including approximately 1,070 Global 2000 enterprises. Non-GAAP operating expenses were $417.0 million, up 13%.
Operational metrics showed a sales team that is still ramping. About 79% of global sales team members were fully ramped as of January 31, 2025. Among customers with 18 months or more of tenure, 76% made a repeat purchase. Their lifetime orders averaged 9.2 times the initial order, and the multiple was 37.9 times for Global 2000 customers. The company also issued convertible notes due 2029 and established a new $500 million revolving credit facility. These moves followed a partial repurchase of the 2027 notes.
For the third quarter of fiscal 2025, Nutanix guided revenue to $620 million to $630 million, non-GAAP operating margin of 17% to 18%, and diluted weighted average shares of approximately 296 million. For the full fiscal year 2025, the company guided revenue to $2.495 billion to $2.515 billion, non-GAAP operating margin of 17.5% to 18.5%, and free cash flow of $650 million to $700 million. The third quarter guidance is for the next quarter, while the fiscal 2025 guidance covers the full year.
Risks include macroeconomic uncertainty, longer sales cycles, and larger deals that take more time to close. The company faces competition, supply chain delays, and reliance on channel and OEM partners. Nutanix also noted that its subscription model can create customer concerns about pricing changes. The need to ramp new sales personnel adds execution risk. The company recorded litigation settlement accrual and legal fees, which weighed on GAAP results. The new convertible notes and credit facility increase financial flexibility but also add interest and conversion considerations. Management also pointed to greater variability in large deal outcomes and increased scrutiny on customer spend. The company also faces risks from customer consolidation, the need to attract and retain qualified employees, and potential delays in customer acceptance of new solutions.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $654.7M | $591.0M | +10.8% | $565.2M | +15.8% |
| Gross profit | $569.4M | $508.3M | +12.0% | $483.7M | +17.7% |
| Gross margin | 87.0% | 86.0% | +1.0 pp | 85.6% | +1.4 pp |
| Research & development | $182.8M | $174.0M | +5.1% | $160.4M | +14.0% |
| Sales & marketing | $261.4M | $253.4M | +3.1% | $236.7M | +10.4% |
| General & administrative | $59.8M | $53.7M | +11.5% | $49.5M | +20.8% |
| Total operating expenses | $504.0M | $481.0M | +4.8% | $446.6M | +12.8% |
| Operating income (loss) | $65.4M | $27.3M | +140.1% | $37.0M | +76.6% |
| Operating margin | 10.0% | 4.6% | +5.4 pp | 6.5% | +3.4 pp |
| Net income (loss) | $56.4M | $29.9M | +88.6% | $32.8M | +72.1% |
| Net margin | 8.6% | 5.1% | +3.6 pp | 5.8% | +2.8 pp |
| Diluted EPS | $0.19 | $0.10 | +$0.09 | $0.12 | +$0.07 |
Risks
As of January 31, 2025, Nutanix had $500.0 million principal of 2027 Notes and $862.5 million principal of 2029 Notes outstanding. The filing states that servicing or refinancing this debt may require significant cash and that failure to generate sufficient cash flows could lead to alternatives such as dilutive financing or asset sales, and ultimately default.
In February 2025, Nutanix entered a $500.0 million senior secured revolving Credit Agreement containing restrictive covenants and a maximum consolidated total leverage ratio tested at each fiscal quarter end. A failure to comply could result in default and acceleration, limiting how the company conducts business.
The 2027 and 2029 Notes have conditional conversion features; if triggered, holders may convert and Nutanix may be required to settle in cash or reclassify principal as a current liability, which would materially reduce net working capital. Holders can also require repurchase for cash upon a fundamental change.
Conversion of the Notes into Class A common stock will dilute existing stockholders and reduce earnings per share. The if-converted method for diluted EPS could adversely affect reported diluted EPS even if the Notes are not converted.
MD&A says the sales pipeline has a higher mix of larger deals that take longer to close, and average sales cycles have modestly elongated compared to historical levels, influenced by the macroeconomic environment and increased scrutiny on spend. These trends are expected to drive greater variability in landing new customers and expanding sales, and top-line results may be adversely affected.
As of January 31, 2025, approximately 79% of Nutanix's global sales team members were fully ramped, while approximately 21% were still ramping. MD&A states that sales and marketing expense increased 10% for the quarter due to 7% sales and marketing headcount growth and expects overall sales and marketing expense to increase in the near term, which may pressure profitability while new representatives ramp.
SaaS KPIs
All quarters →Free Cash Flow
Annual Recurring Revenue (ARR)
Non-GAAP Gross Margin
Total Billings
Subscription Billings
Non-GAAP Operating Margin
Average Contract Duration
Global 2000 enterprises
Non-GAAP operating income
ARR Growth (YoY)
Summary, forecast, risks and KPIs are extracted from Nutanix, Inc.'s SEC filings for Q2 FY2025 (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 2, 2026.