Summary
Nutanix reported fiscal 2026 second quarter revenue of $722.8 million, up 10.4% from the prior-year quarter. Gross profit was $631.6 million, up 10.9%. Operating income was $84.1 million, up 28.6%. Net income was $103.0 million, up 82.6%. Diluted EPS was $0.36, up 89.5%. Gross margin was 87.4%, up 0.4 percentage points. Operating margin was 11.6%, up 1.6 percentage points. For the first six months of fiscal 2026, revenue was $1.39 billion, up 11.9%. Net income was $165.1 million, up 91.2%. Diluted EPS was $0.57, up 90.0%. Gross margin was 87.2%, up 0.7 percentage points. Operating margin was 9.6%, up 2.1 percentage points.
Cash generation was mixed. Operating cash flow for the quarter was $197.3 million, down 11.0% from the prior-year quarter. Capital expenditures were $5.9 million, down 82.9%. Free cash flow, a non-GAAP measure, was $191.4 million, compared with $187.1 million in the prior-year quarter. Deferred revenue was $2.20 billion, up 8.8%. For the first six months, operating cash flow was $394.2 million, up 2.8%, and capital expenditures were $28.2 million, down 36.4%. The company completed a $300 million accelerated share repurchase during the quarter.
Key performance metrics showed growth. Annual recurring revenue was $2.36 billion, up 16% from $2.03 billion. Average contract duration was 3.1 years, compared with 3.0 years. Total end customers were 30,980, compared with 27,870. Net dollar-based retention rate was 107%, compared with 109%. Non-GAAP operating margin was 26.2%, compared with 24.6%. Non-GAAP operating income was $189.0 million, compared with $161.3 million. The company listed its Nutanix Cloud Platform solution in the AWS Marketplace for the U.S. Intelligence Community and expanded sovereign cloud capabilities. It will hold Investor Day 2026 on April 7, 2026 in Chicago.
Guidance reflects supply chain pressure. For the third quarter of fiscal 2026, Nutanix expects revenue of $680 million to $690 million and a non-GAAP operating margin of 16% to 17%, with weighted average diluted shares of about 288 million. For the full fiscal year 2026, the company expects revenue of $2.80 billion to $2.84 billion, a non-GAAP operating margin of 21% to 22%, and free cash flow of $745 million to $775 million. Management said supply chain constraints drove longer server lead times for customers as the quarter progressed. The company expects this dynamic to affect the timing of near-term revenue and free cash flow, and it factored the impact into its third quarter and updated full-year guidance. Bookings expectations are higher than before, but revenue and free cash flow from those bookings are expected to be realized later. The company said a majority of customer transactions involve a software-only fulfillment motion. Beginning in the third quarter of fiscal 2026, it enabled certain customers to purchase software independently of hardware delivery, which may affect the timing of revenue recognition and ARR.
Risks remain. Hardware component availability and extended lead times could continue to delay customer deployments and shift revenue recognition and cash flows between periods. Macroeconomic and geopolitical uncertainty, inflation, interest rates, foreign currency fluctuations, tariffs, trade restrictions, and changes in government policy or spending could affect customer buying patterns and sales cycles. The company also faces competition, including from public cloud infrastructure, and execution risks around new solutions, sales productivity, channel and OEM relationships, and subscription model transitions. Nutanix maintains a full valuation allowance against its U.S. federal and state deferred tax assets as of January 31, 2026. A valuation allowance release is possible over the next several quarters if current profit trends persist, but the timing and amount are uncertain.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $722.8M | $670.6M | +7.8% | $654.7M | +10.4% |
| Gross profit | $631.6M | $583.1M | +8.3% | $569.4M | +10.9% |
| Gross margin | 87.4% | 87.0% | +0.4 pp | 87.0% | +0.4 pp |
| Research & development | $202.3M | $187.5M | +7.9% | $182.8M | +10.7% |
| Sales & marketing | $277.5M | $285.2M | -2.7% | $261.4M | +6.2% |
| General & administrative | $67.6M | $61.1M | +10.7% | $59.8M | +13.0% |
| Total operating expenses | $547.4M | $533.8M | +2.6% | $504.0M | +8.6% |
| Operating income (loss) | $84.1M | $49.3M | +70.5% | $65.4M | +28.6% |
| Operating margin | 11.6% | 7.4% | +4.3 pp | 10.0% | +1.7 pp |
| Net income (loss) | $103.0M | $62.1M | +65.9% | $56.4M | +82.6% |
| Net margin | 14.3% | 9.3% | +5.0 pp | 8.6% | +5.6 pp |
| Diluted EPS | $0.36 | $0.21 | +$0.15 | $0.19 | +$0.17 |
| Net retention rate | 107.0% | 109.0% | -2.0 pp | — | — |
Risks
Nutanix disclosed that constraints affecting the availability of certain hardware components at manufacturers became increasingly acute in the latter half of the second quarter of fiscal 2026, extending hardware lead times. These delays have delayed and may continue to delay customers' ability to deploy hardware and consume software, affecting the timing of revenue recognition and cash flows.
The sales pipeline has shifted to a higher mix of larger deal opportunities that often take longer to close, require more customer executive review, involve greater competition, and create greater variability in timing, outcome, and deal structure. Management said these trends drive greater variability in landing new customers and expanding sales, and top-line results may be adversely affected.
Net dollar-based retention rate was 107% as of January 31, 2026, compared to 109% as of January 31, 2025. The company also said its subscription-based model and product transitions may cause pricing concerns and confusion among customers, which can slow adoption and renewal rates.
Nutanix plans to continue investing in sales and marketing, but new representatives take time to ramp, with average sales team members typically becoming fully ramped up around the start of their fourth quarter. Focus on major accounts and large deals may make ramping longer and potentially significantly delay full productivity, impacting overall sales team productivity.
Revenue from subscription term-based licenses is generally recognized upfront, so any reduction in total average contract duration would decrease upfront license revenue and could adversely affect revenue for the applicable period. Ratable subscription revenue may not fully or immediately reflect declines in new subscriptions or renewals in a given fiscal quarter.
Nutanix said worldwide economic and geopolitical conditions, including inflation, interest rate fluctuations, foreign currency fluctuations, tariffs or other trade restrictions, and changes in government policy or spending, may adversely affect customer and partner buying patterns, sales cycle length, pipeline conversion, and top-line growth expectations.
SaaS KPIs
All quarters →Free Cash Flow
Annual Recurring Revenue (ARR)
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Total end customers
Average Contract Duration
Net Dollar-Based Retention Rate (NRR)
Current Remaining Performance Obligations (cRPO)
Summary, forecast, risks and KPIs are extracted from Nutanix, Inc.'s SEC filings for Q2 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 2, 2026.