Summary
Nutanix closed fiscal 2025 with a stronger fourth quarter. Revenue rose 19.2% to $653.3 million, and full-year revenue rose 18.1% to $2.54 billion. Gross margin improved to 87.2% in the quarter, up 1.9 percentage points, and full-year gross margin reached 86.8%, also up 1.9 percentage points. Operating income swung to $31.2 million in the quarter, up $43.4 million and swung to a profit, while full-year operating income was $172.5 million, up $164.98 million. Operating margin improved to 4.8% in the quarter, up 7.0 percentage points, and full-year operating margin was 6.8%, up 6.4 percentage points. Net income was $38.7 million in the quarter, up $164.8 million and swung to a profit, and full-year net income was $188.4 million, up $313.1 million and swung to a profit. Diluted EPS for fiscal 2025 was $0.65, up $1.16 and swung to a profit.
Cash generation was mixed. Net cash provided by operating activities was $219.5 million in the quarter, down 10.3%, but $821.5 million for the fiscal year, up 22.1%. Free cash flow, a non-GAAP measure, was $207.8 million in the quarter, down $16.5 million, and $750.2 million for the fiscal year, up $152.5 million. Deferred revenue ended the year at $2.11 billion, up 12.8%. Capital expenditures were $11.8 million in the quarter, down 42.5%, and $71.3 million for the fiscal year, down 5.3%.
Annual recurring revenue reached $2.22 billion, up 17%, and average contract duration was 3.2 years in the fourth quarter, up 0.1 year. Nutanix added over 2,700 new customers and ended the year with 29,290 total end customers. The company signed new or enhanced agreements with AWS, Pure Storage, NVIDIA and Google, and it raised its share repurchase authorization by $350 million. On a non-GAAP basis, gross margin was 88.3% in the quarter, up 140 basis points, and operating margin was 18.3%, up 540 basis points. Non-GAAP operating income was $119.5 million in the quarter, up $49.0 million. The company reported a Rule of 40 score of 48, its second year in a row above 40.
Net dollar-based retention rate slipped to 108% from 114% as of July 31, 2024. That decline matters because renewals are becoming a larger part of the subscription model. Nutanix also said it will update its ARR methodology beginning in the first quarter of fiscal 2026. The customer base remains deep, with about 77% of end customers who have been with the company for 18 months or longer making a repeat purchase as of July 31, 2025. Those same customers have total lifetime orders that are more than 9.6 times their initial order on average, and the multiple is about 37.2 times for Global 2000 customers.
For the first quarter of fiscal 2026, Nutanix guided revenue to $670 million to $680 million and non-GAAP operating margin to 19.5% to 20.5%. Weighted average diluted shares for the first quarter are expected to be about 296 million. For full fiscal 2026, the company guided revenue to $2.90 billion to $2.94 billion, non-GAAP operating margin to 21% to 22%, and free cash flow to $790 million to $830 million. Risks include competition from public cloud infrastructure, macroeconomic and geopolitical uncertainty, reliance on channel and OEM partners, supply chain delays, longer sales cycles for larger deals, and customer concerns about subscription pricing. The retention decline and the pending ARR methodology change are additional items to monitor.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $653.3M | $639.0M | +2.2% | $548.0M | +19.2% |
| Gross profit | $569.4M | $556.0M | +2.4% | $467.0M | +21.9% |
| Gross margin | 87.2% | 87.0% | +0.2 pp | 85.2% | +2.0 pp |
| Research & development | $193.7M | $186.4M | +3.9% | $167.4M | +15.7% |
| Sales & marketing | $281.3M | $260.4M | +8.0% | $259.4M | +8.5% |
| General & administrative | $63.3M | $60.5M | +4.5% | $52.4M | +20.7% |
| Total operating expenses | $538.2M | $507.3M | +6.1% | $479.2M | +12.3% |
| Operating income (loss) | $31.2M | $48.6M | -35.8% | -$12.2M | +356.1% |
| Operating margin | 4.8% | 7.6% | -2.8 pp | -2.2% | +7.0 pp |
| Net income (loss) | $38.6M | $63.4M | -39.0% | -$126.1M | +130.7% |
| Net margin | 5.9% | 9.9% | -4.0 pp | -23.0% | +28.9 pp |
| Diluted EPS | $0.13 | $0.22 | -$0.09 | -$0.52 | +$0.65 |
| Net retention rate | 108.0% | 110.0% | -2.0 pp | — | — |
Risks
The global macroeconomic environment remains uncertain, and U.S. tariffs targeting imports may increase the cost of IT products and reduce available IT budgets or shift spending priorities away from Nutanix solutions. Customers may reprioritize spending, delay or cancel purchasing decisions, and extend sales cycles.
An increasing number of customers are allocating IT spending toward artificial intelligence, machine learning, and generative AI capabilities, and the IT infrastructure market for AI workloads is intensely competitive and rapidly evolving. Nutanix must deliver differentiated, scalable, AI-ready infrastructure while managing new regulatory, intellectual property, privacy, and security risks from AI technologies.
Nutanix believes its opportunity to increase market share has grown since Broadcom acquired VMware in November 2023, but many prospective customers may remain under multi-year VMware by Broadcom contracts or defer migration until their next refresh cycle. Broadcom may also respond aggressively, and Nutanix may not compete effectively across customer segments or geographies.
Nutanix's 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. These trends drive greater variability in landing new customers and expanding sales to existing customers, and top-line results may be adversely affected.
Sales through Nutanix's top two distributors to end customers represented 41% of total revenue for fiscal 2025. The company relies primarily on indirect sales channels, and its agreements with channel partners are generally non-exclusive, so partners may not prioritize Nutanix solutions.
Nutanix's future success depends on existing end customers renewing or upgrading subscriptions and support and entitlement agreements and making additional purchases. Net dollar-based retention rate was 108% as of July 31, 2025, compared to 114% as of July 31, 2024.
Nutanix has seen higher-than-normal attrition among sales representatives, and it must recruit, train, and ramp replacements to full productivity. Average sales team members typically become fully ramped around the start of their fourth quarter of employment, and failure to do so may prevent Nutanix from achieving its growth targets.
Nutanix recently expanded its offerings to include support for qualified third-party external storage platforms, which may negatively impact sales of its core HCI offering and increase complexity and reliance on third-party technologies. If customers adopt external storage as a permanent architecture rather than a transitional step toward full HCI adoption, the investment may not yield the anticipated return.
Subscription revenue comprised 95% of total revenue for fiscal 2025, and a significant portion is recognized ratably over the contractual service period, so downturns or upturns in sales are not immediately reflected in results. Cloud-based ratable subscription arrangements are generally short-term, and customers may cancel at any time.
Nutanix faces an evolving AI regulatory landscape, including the European Union AI Act and U.S. state laws such as the Colorado AI Act, California AI Transparency Act, Utah Artificial Intelligence Policy Act, and Texas Responsible AI Governance Act. Compliance may require additional resources, change business practices, and expose Nutanix to intellectual property or privacy claims.
Nutanix must service and repay outstanding convertible notes, including the 0.50% convertible senior notes due 2029 issued in December 2024, and comply with covenants under its revolving credit facility. The Revolver financial covenant requires a total leverage ratio of less than or equal to 3.75:1.00, tested at the end of each fiscal quarter.
SaaS KPIs
All quarters →Repeat purchase rate (18+ months)
Net Dollar-Based Retention Rate (NRR)
Summary, forecast, risks and KPIs are extracted from Nutanix, Inc.'s SEC filings for Q4 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.