Simran Deswal

Simran Deswal asked about the dynamics of Nutanix's Net Dollar-Based Retention Rate (NRR), specifically how new logos versus expansions contributed to its flat quarter-over-quarter performance, and sought clarity on the U.S. Federal business's performance relative to expectations and the impact of the government shutdown.

Answer

CFO Rukmini Sivaraman explained that NRR reflects retention and expansion, while new logos contribute to overall ARR growth but don't directly impact NRR. She noted that NRR stabilized quarter-over-quarter. Regarding the U.S. Federal business, Ms. Sivaraman stated it saw double-digit year-over-year growth in Q1, off an easy comparison, but expects higher variability going forward due to personnel and policy changes, and the recent government shutdown, all of which are factored into guidance.

Simran Deswal inquired about the dynamics of Nutanix's Net Dollar-Based Retention (NRR) rate, its flatness quarter-over-quarter, and the balance between new logo additions and expansions for fiscal year 2026. Additionally, Deswal asked for insights into the US Federal business performance in Q1 relative to expectations and the impact of any government shutdown.

Answer

Rukmini Sivaraman, Nutanix's CFO, explained that NRR stabilization reflects good customer retention and expansion, noting that new logos generally don't directly affect NRR. She clarified that US Federal business saw double-digit year-over-year growth in Q1, off an easy comparison, but expects higher variability going forward due to personnel and policy changes, and the recent government shutdown. Nutanix remains optimistic about the long-term opportunity for the US Fed business.