Fourth quarter and fiscal year 2026
Filed Aug 26, 2026Nutanix Reports Fourth Quarter and Fiscal 2026 Financial Results Reports 16% YoY ARR Growth and Strong Free Cash Flow for Fiscal 2026 Delivers Outperformance Across All Fourth Quarter Guided Metrics
Fourth-quarter revenue and ARR each grew 16% year over year, non-GAAP operating margin expanded 790 basis points to 26.2%, and free cash flow increased to $277.6 million. Fiscal 2027 guidance calls for $3.180 - $3.230 billion of revenue, 24% to 25% non-GAAP operating margin, and $850 - $950 million of free cash flow.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Annual Recurring Revenue (ARR), Q4 FY26other | $2.55 billion | – | 16% |
| Average Contract Duration, Q4 FY26other | 3.3 years | – | 0.1 years |
| Revenue, Q4 FY26GAAP | $757.1 million | – | 16% |
| GAAP gross margin, Q4 FY26GAAP | 86.0% | – | (120) bps |
| Non-GAAP gross margin, Q4 FY26non-GAAP | 87.7% | – | (60) bps |
| GAAP operating expenses, Q4 FY26GAAP | $581.4 million | – | 8% |
| Non-GAAP operating expenses, Q4 FY26non-GAAP | $465.6 million | – | 2% |
| GAAP operating income, Q4 FY26GAAP | $70.0 million | – | $38.8 million |
| Non-GAAP operating income, Q4 FY26non-GAAP | $198.0 million | – | $78.5 million |
| GAAP operating margin, Q4 FY26GAAP | 9.2% | – | 440 bps |
| Non-GAAP operating margin, Q4 FY26non-GAAP | 26.2% | – | 790 bps |
| GAAP net income, Q4 FY26GAAP | $1,269.632 million | – | – |
| Non-GAAP net income, Q4 FY26non-GAAP | $175.353 million | – | – |
| GAAP diluted net income per share, Q4 FY26GAAP | $4.34 | – | – |
| Non-GAAP diluted net income per share, Q4 FY26non-GAAP | $0.60 | – | – |
| Net cash provided by operating activities, Q4 FY26GAAP | $315.0 million | – | $95.5 million |
| Free cash flow, Q4 FY26non-GAAP | $277.6 million | – | $69.8 million |
| Annual Recurring Revenue (ARR), FY26other | $2.55 billion | – | 16% |
| Average Contract Duration, FY26other | 3.2 years | – | 0.1 years |
| Revenue, FY26GAAP | $2.85 billion | – | 12% |
| GAAP gross margin, FY26GAAP | 86.8% | – | 0 bps |
| Non-GAAP gross margin, FY26non-GAAP | 88.0% | – | (10) bps |
| GAAP operating expenses, FY26GAAP | $2.20 billion | – | 8% |
| Non-GAAP operating expenses, FY26non-GAAP | $1.84 billion | – | 8% |
| GAAP operating income, FY26GAAP | $274.0 million | – | $101.5 million |
| Non-GAAP operating income, FY26non-GAAP | $675.4 million | – | $139.3 million |
| GAAP operating margin, FY26GAAP | 9.6% | – | 280 bps |
| Non-GAAP operating margin, FY26non-GAAP | 23.7% | – | 260 bps |
| GAAP net income, FY26GAAP | $1,506.837 million | – | – |
| Non-GAAP net income, FY26non-GAAP | $596.755 million | – | – |
| GAAP diluted net income per share, FY26GAAP | $5.17 | – | – |
| Non-GAAP diluted net income per share, FY26non-GAAP | $2.04 | – | – |
| Net cash provided by operating activities, FY26GAAP | $916.7 million | – | $95.2 million |
| Free cash flow, FY26non-GAAP | $840.7 million | – | $90.5 million |
| Remaining performance obligations, July 31, 2026other | $3,440.411 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Product revenue, Q4 FY26 | $388.388 million | – | – |
| Support, maintenance and other services revenue, Q4 FY26 | $368.690 million | – | – |
| Subscription revenue, Q4 FY26 | $719.111 million | – | – |
| Professional services and other revenue, Q4 FY26 | $37.967 million | – | – |
| Product revenue, FY26 | $1,489.693 million | – | – |
| Support, maintenance and other services revenue, FY26 | $1,363.852 million | – | – |
| Subscription revenue, FY26 | $2,712.274 million | – | – |
| Professional services and other revenue, FY26 | $141.271 million | – | – |
First quarter fiscal 2027 and fiscal 2027 outlook
- Revenue$755 - $765 million for the first quarter fiscal 2027; $3.180 - $3.230 billion for fiscal 2027
- NoteNon-GAAP operating margin of 26% to 28% for the first quarter fiscal 2027
- NoteWeighted Average Shares Outstanding (Diluted) of approximately 294 million for the first quarter fiscal 2027
- NoteNon-GAAP operating margin of 24% to 25% for fiscal 2027
- NoteFree cash flow of $850 - $950 million for fiscal 2027
Capital returns
- Repurchases of common stock were $483.543 million for fiscal 2026, compared with $307.900 million for fiscal 2025.
What drove it
- ARR was $2.55 billion, up 16% year over year, with average contract duration increasing to 3.3 years in Q4 FY26.
- Nutanix added over 3,000 new customers in fiscal 2026.
- The company cited new or enhanced agreements with AMD, Lenovo, NetApp and NVIDIA.
- The company highlighted cloud-platform innovation focused on AI and broader support for external storage.
- Current deferred revenue increased to $1,246.575 million and total remaining performance obligations increased to $3,440.411 million as of July 31, 2026.
Concerns
- Q4 FY26 GAAP gross margin declined to 86.0% from 87.2%, and non-GAAP gross margin declined to 87.7% from 88.3%.
- GAAP net income of $1,269.632 million in Q4 FY26 included a $(1,186.917) million benefit from income taxes. The non-GAAP reconciliation excludes a $(1,208.216) million valuation allowance release related to U.S. deferred tax assets.
- Q4 FY26 purchases of property and equipment were $37.443 million, compared with $11.750 million in Q4 FY25.
- Fiscal 2027 guidance does not provide GAAP operating margin, GAAP profitability, gross-margin, operating-expense, or tax-rate guidance.
What to watch
- Execution against first-quarter fiscal 2027 revenue guidance of $755 - $765 million and non-GAAP operating-margin guidance of 26% to 28%.
- Sustainability of 16% ARR growth and the progression of average contract duration.
- Whether fiscal 2027 free cash flow reaches the guided $850 - $950 million range.
- Gross-margin trends after the Q4 FY26 GAAP and non-GAAP gross-margin declines.
- Demand and customer adoption for Nutanix Enterprise AI, the Model Context Protocol Server for Nutanix Cloud Platform, Dell Private Cloud with PowerStore, and external-storage support.
Balance sheet and cash flow
- Cash and cash equivalents were $777.308 million as of July 31, 2026, compared with $769.502 million as of July 31, 2025.
- Short-term investments were $1,584.155 million as of July 31, 2026, compared with $1,223.234 million as of July 31, 2025.
- Convertible senior notes, net were $1,348.711 million as of July 31, 2026, compared with $1,343.818 million as of July 31, 2025.
- Current deferred revenue was $1,246.575 million and non-current deferred revenue was $1,176.794 million as of July 31, 2026.
- Remaining performance obligations were $1,686.685 million current, $1,293.675 million for 13-36 months, and $460.051 million thereafter as of July 31, 2026.
- Purchases of property and equipment were $76.013 million in fiscal 2026, compared with $71.283 million in fiscal 2025.
- Net cash provided by operating activities was $916.688 million in fiscal 2026, compared with $821.456 million in fiscal 2025.
Analysis
Nutanix closed fiscal 2026 with fourth-quarter revenue of $757.1 million, up 16% year over year, and ARR of $2.55 billion, also up 16%. The company reported average contract duration of 3.3 years in the quarter, compared with 3.2 years a year earlier. Fiscal-year revenue increased 12% to $2.85 billion, while ARR ended the year at $2.55 billion. The company also stated that it added over 3,000 new customers during fiscal 2026.
Profitability improved materially below gross profit. Q4 GAAP operating income rose to $70.0 million from $31.2 million, while non-GAAP operating income increased to $198.0 million from $119.5 million. Non-GAAP operating margin expanded to 26.2% from 18.3%, and fiscal-year non-GAAP operating margin increased to 23.7% from 21.1%. This operating leverage occurred despite Q4 GAAP gross margin declining 120 basis points to 86.0% and non-GAAP gross margin declining 60 basis points to 87.7%.
The reported GAAP earnings figures require separation from the operating result. Q4 GAAP net income was $1,269.632 million and GAAP diluted net income per share was $4.34, but the quarter included a $(1,186.917) million benefit from income taxes. The non-GAAP reconciliation identifies a $(1,208.216) million valuation allowance release related to U.S. deferred tax assets among the adjustments. Q4 non-GAAP net income was $175.353 million and non-GAAP diluted net income per share was $0.60.
Cash generation remained strong. Q4 operating cash flow was $315.0 million and free cash flow was $277.6 million, compared with $219.5 million and $207.8 million, respectively, a year earlier. For fiscal 2026, operating cash flow was $916.7 million and free cash flow was $840.7 million. Nutanix repurchased $483.543 million of common stock during fiscal 2026. Cash and cash equivalents were $777.308 million, short-term investments were $1,584.155 million, and convertible senior notes, net were $1,348.711 million as of July 31, 2026.
The fiscal 2027 outlook calls for $3.180 - $3.230 billion of revenue, 24% to 25% non-GAAP operating margin, and $850 - $950 million of free cash flow. For the first quarter, Nutanix guided to $755 - $765 million of revenue and 26% to 28% non-GAAP operating margin. The release attributes growth initiatives to partnerships, AI offerings, cloud-platform innovation, and external-storage support. The central operating items to follow are ARR growth, gross-margin direction, conversion of remaining performance obligations into revenue, and delivery against the free-cash-flow guide.
Management, verbatim
Our fourth quarter was a strong finish to fiscal 2026, a year in which we delivered solid top and bottom line performance and added over 3,000 new customers.
Rajiv Ramaswami, CEO of Nutanix
Our fiscal 2026 results demonstrated a good balance of top and bottom line performance with 16% year-over-year ARR growth and strong free cash flow generation.
Rukmini Sivaraman, CFO of Nutanix
Not in the filing
stated, not guessed- Previous-quarter outlook, so no comparison of actual results with prior guidance is available.
- Sequential revenue, ARR, margin, profitability, and cash-flow comparisons.
- Reportable operating-segment revenue and profitability disclosure.
- Dividend declaration or payment information.
- GAAP operating-margin, GAAP earnings, gross-margin, operating-expense, and tax-rate guidance for first-quarter fiscal 2027 or fiscal 2027.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.