Summary
Nutanix closed FY2021 Q3 with revenue of $344.5 million, up 8.2% from the prior-year quarter. Gross profit was $270.0 million, up 9.8%, and gross margin was 78.4%, up 1.1 percentage points. The operating loss narrowed to $180.6 million, and operating margin was -52.4%, up 19.9 percentage points. Net loss of $123.6 million narrowed, and diluted EPS was -$0.60, an improvement from the prior-year quarter. Operating cash flow was -$55.6 million, up 34.5% from the prior-year quarter. Capital expenditures were $15.9 million, down 51.1%. Deferred revenue was $1.27 billion, up 13.5% from the prior-year quarter. For the nine months, revenue was $1.00 billion, up 2.4%, and net loss of $676.1 million was reported. Operating cash flow for the nine months was -$75.2 million, up 54.0%, and capital expenditures were $41.1 million, down 43.0%.
The quarter's non-GAAP metrics showed similar momentum. ACV billings hit $159.9 million, up 18% year over year, and run-rate ACV was $1.45 billion, up 25%. Subscription billings were $330.8 million, while total billings were $371.1 million. Non-GAAP gross margin was 81.7%, and non-GAAP operating expenses were $361.5 million, down 7%. Free cash flow was -$71.5 million, compared with -$117.5 million in the prior-year quarter. Average contract term was 3.3 years, down from 3.8 years. The shorter term reflects Nutanix's subscription transition, which shifts revenue recognition and creates billings variability. Management said the growing renewals pipeline should support future top line growth, sales and marketing efficiency, and predictability.
Operational highlights included a broader customer base. Nutanix ended the quarter with approximately 19,430 end customers, up from approximately 16,580 a year earlier. It counted approximately 960 Global 2000 enterprises. Among customers with 18 months or longer tenure, about 69% made a repeat purchase, and their lifetime orders were more than 6.1 times their initial order on average. That multiple rose to approximately 16.2 times for Global 2000 customers. The company extended partnerships with Lenovo for hosted desktops, AWS GovCloud for hybrid cloud deployments, and Microsoft Azure Arc for Kubernetes management. Nutanix also received a Gartner Peer Insights Customers' Choice recognition for hyperconverged infrastructure for the third year, with an average score of 4.7 out of 5. The quarter's customer additions included the U.S. Air Force and Global 2000 names such as Alimentation Couche-Tard, ICICI Bank, Sony Device Technology (Thailand), and NTT Communications.
For Q4 FY2021, management guided ACV billings to $170 million to $175 million. It guided non-GAAP gross margin to approximately 81.5% to 82.0% and non-GAAP operating expenses to $380 million to $385 million. Management expects weighted average shares outstanding of approximately 212 million. Q3 non-GAAP operating expenses were $361.5 million. Risks remain substantial. COVID-19 continues to affect demand, sales cycles, and travel, while the subscription transition compresses average contract terms and can delay revenue recognition. Nutanix recently reduced global headcount by 2.5%, mostly in sales and marketing, and only about 75% of its global sales team was fully ramped as of April 30, 2021. Higher than normal sales representative attrition could slow productivity. Management expects operating and free cash flow to remain negative during the next 12 months, and the company carries convertible notes due in 2023 and 2026. Nutanix also announced an Investor Day for June 22nd, and said its cash and short-term investments should meet anticipated needs for at least the next 12 months.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2021 | Q2 FY2021 | QoQ | Q3 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $344.5M | $346.4M | -0.5% | $318.3M | +8.2% |
| Gross profit | $270.0M | $275.4M | -2.0% | $246.0M | +9.8% |
| Gross margin | 78.4% | 79.5% | -1.1 pp | 77.3% | +1.1 pp |
| Research & development | $144.9M | $135.6M | +6.9% | $141.3M | +2.5% |
| Sales & marketing | $263.4M | $261.1M | +0.9% | $299.2M | -12.0% |
| General & administrative | $42.3M | $35.0M | +20.8% | $35.6M | +18.8% |
| Total operating expenses | $450.6M | $431.7M | +4.4% | $476.2M | -5.4% |
| Operating income (loss) | -$180.6M | -$156.2M | -15.6% | -$230.2M | +21.5% |
| Operating margin | -52.4% | -45.1% | -7.3 pp | -72.3% | +19.9 pp |
| Net income (loss) | -$123.6M | -$287.4M | +57.0% | -$240.7M | +48.6% |
| Net margin | -35.9% | -83.0% | +47.1 pp | -75.6% | +39.7 pp |
Risks
Nutanix disclosed higher than normal attrition among sales representatives and a recent 2.5% global headcount reduction primarily in sales and marketing. As of April 30, 2021, only about 75% of global sales team members were fully ramped, with about 25% still ramping, which could delay revenue growth.
Nutanix relies substantially on Super Micro and Flextronics to manufacture, assemble, and test Nutanix-branded NX series appliances, and the Flextronics agreement terminates on November 1, 2021. The agreements contain no minimum long-term manufacturing commitments or price assurances, and component cost increases could harm gross margins; as of April 30, 2021, Nutanix had approximately $66.4 million in guarantees to OEM partners related to certain components.
The shift to subscription term-based licenses and ACV-based sales compensation may compress average contract terms, and customers may choose shorter subscription terms or pay only the initial year upfront. Product revenue decreased 5% for the three months and 14% for the nine months ended April 30, 2021, and total average contract term decreased to approximately 3.3 years for the three months ended April 30, 2021 from approximately 3.8 years in the prior-year period.
The COVID-19 pandemic has curtailed demand for certain solutions, reduced IT spending, lengthened sales cycles, caused supply chain disruptions, and increased component prices. Some cost savings measures are temporary, and operating expenses may increase as travel and other expenses return.
Nutanix expects operating and free cash flow to continue to be negative during the next 12 months due to business investments and the subscription transition. Operating cash flow was negative $55.6 million for the quarter, up 34.5% versus the prior-year quarter, and negative $75.2 million year to date, up 54.0% versus the prior-year period.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Gross Margin
Total Billings
Subscription Billings
Total end customers
Repeat purchase rate (18+ months)
Average Contract Term
Global 2000 enterprises
Subscription Revenue
Non-GAAP Operating Expenses
ACV Billings
Summary, forecast, risks and KPIs are extracted from Nutanix, Inc.'s SEC filings for Q3 FY2021 (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.