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Nutanix, Inc. (NTNX)·Q4 2025 Earnings Summary

Executive Summary

  • Nutanix delivered a clean beat across all guided metrics in Q4 FY’25: revenue $653.3M (+19% y/y) vs S&P Global consensus $643.0M*, non‑GAAP diluted EPS $0.37 vs $0.33*, and non‑GAAP operating margin 18.3% (guide: 15.5–16.5%) . Q4 free cash flow was $207.8M (32% margin) .
  • FY’25: revenue $2.54B (+18% y/y) and non‑GAAP operating margin 21.1%; free cash flow $750.2M (30% margin); Rule of 40 of 48 for a second year .
  • Initial FY’26 outlook: revenue $2.90–$2.94B, non‑GAAP operating margin 21–22%, and FCF $790–$830M; Q1’26 revenue guide $670–$680M (in line with $676.9M consensus*) .
  • Strategic catalysts: first wins supporting Dell PowerFlex; Pure Storage integrated solution entering early access with GA targeted by calendar year‑end; expanded Google Cloud support in public preview; marquee FI win in Germany; repurchase authorization increased by $350M to $461M total .

What Went Well and What Went Wrong

What Went Well

  • Broad beat and execution: “exceeded all of our guided metrics” in Q4; Q4 rev $653M (+19% y/y) and FY’25 Rule of 40 = 48 (revenue growth + FCF margin) .
  • Strategic wins and partnerships: First Dell PowerFlex deals (two Global 2000 customers) and a long‑term FI contract to migrate workloads to Nutanix; early access with Pure Storage; Google Cloud support moved to public preview .
  • Profitability and cash generation: Q4 non‑GAAP operating margin 18.3% (above guide); FY’25 non‑GAAP operating margin 21.1%; FY’25 FCF $750.2M (30% margin) .

What Went Wrong

  • Retention trend cooled: NRR was 108% in Q4 (down sequentially), with headwinds from ARR timing effects and larger initial new‑logo deal sizes (harder to expand from a higher base) .
  • Federal vertical variability: U.S. Federal deals saw longer cycles and increased variability despite a good Q4; management incorporated conservatism into FY’26 outlook .
  • Duration headwind into FY’26: Average contract duration expected to decline slightly y/y, a headwind to upfront license revenue recognition and free cash flow; also tapering of non‑recurring partner contra‑expense (R&D) creates a $10–$15M OpEx headwind .

Financial Results

Results vs. Estimates and Prior Quarters

MetricQ2 2025Q3 2025Q4 2025
Revenue ($M)$654.7 $639.0 $653.3
Revenue y/y %16% 22% 19%
Revenue consensus ($M)642.9*626.8*643.0*
Non‑GAAP gross margin %88.3% 88.2% 88.3%
Non‑GAAP op margin %24.6% 21.5% 18.3%
Non‑GAAP diluted EPS$0.56 $0.42 $0.37
EPS consensus$0.472*$0.381*$0.327*

Note: Consensus values retrieved from S&P Global.*

Revenue mix (subscription-led)

Revenue Mix ($M)Q2 2025Q3 2025Q4 2025
Subscription revenue$624.4 $609.7 $616.0
Professional services$28.0 $28.0 $28.9
Other non‑subscription$2.3 $1.3 $8.4
Total revenue$654.7 $639.0 $653.3

KPIs and Cash

KPIQ2 2025Q3 2025Q4 2025
ARR ($B)$2.060 $2.143 $2.223
Avg. contract duration (yrs)3.0 3.1 3.2
Total billings ($M)$776.4 $647.0 $726.9
Free cash flow ($M)$187.1 $203.4 $207.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
RevenueQ4 2025$635–$645M (Q3 PR) $653.3M Beat vs guide
Non‑GAAP op marginQ4 202515.5%–16.5% (Q3 PR) 18.3% Beat vs guide
Diluted sharesQ4 2025~297M (Q3 PR) 297.5M In line
RevenueQ1 2026—$670–$680M New
Non‑GAAP op marginQ1 2026—19.5%–20.5% New
Diluted sharesQ1 2026—~296M New
RevenueFY 2026—$2.90–$2.94B New
Non‑GAAP op marginFY 2026—21%–22% New
Free cash flowFY 2026—$790–$830M New

Additional capital allocation: Repurchase authorization increased by $350M (total $461M authorization) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2: Q2’25)Previous Mentions (Q‑1: Q3’25)Current (Q4’25)Trend
External storage (PowerFlex/Pure)External storage GA; Dell PowerFlex first supported; Pure partnership announced Reinforced external storage strategy; PowerFlex GA end of April; Pure GA targeted by CY‑end First PowerFlex wins with two G2000s; Pure in early access; GA by CY‑end Positive traction from pilots to early wins
AI (GPT‑in‑a‑Box/Enterprise AI)NAI update; NVIDIA integrations emphasized in Q2 ECI and product notes GA of enhanced Enterprise AI; NVIDIA integration; agentic AI focus Enterprise inferencing “early innings”; growing interest/use cases (fraud, AML, support) Early adoption; use‑case driven
Google Cloud supportNoted balance sheet/convertibles; no GCP detail Announced expansion to GCP; public preview in summer Public preview live; GA targeted by year‑end pending Google bare metal region availability Building toward GA
VMware displacementCompetitive alternative cited; demand from customers seeking “trusted long‑term partner” Strong new logos; pipelines aided by industry M&A disruption Multi‑year journey; “second inning”; varied customer timing; managed service provider opportunity Durable multi‑year share shift
U.S. Federal—Macro/federal personnel changes create longer cycles and variability Variability persists; baked into FY’26 guide Cautious
NRR/ARR dynamics—NRR 110% in Q3 NRR 108%; ARR methodology update starting Q1’26; historical impact ≤2% Slightly softer NRR; ARR calc refinement

Management Commentary

  • CEO: “We are happy to have exceeded all of our guided metrics… delivered quarterly revenue of $653,000,000 up 19% year over year… and strong free cash flow generation… Rule of 40 score of 48” .
  • CEO on external storage: first wins for PowerFlex with two G2000 customers; “encouraged by these initial wins and… customer interest” .
  • CFO: Q4 non‑GAAP op margin 18% (above 15.5–16.5% guide) due to higher gross margin and lower OpEx; non‑GAAP EPS $0.37 on ~297M diluted shares .
  • CFO on FY’26 framing: slight y/y decline in average contract duration; growing but slower renewals cohort growth; OpEx headwinds of ~$25M (delayed FY’25 hiring) and $10–$15M from tapering non‑recurring partner contra‑expense in R&D .
  • CFO on ARR/NRR: Q4 NRR 108% with net timing headwind; larger initial new‑logo deal sizes can temper future expansion percentages .

Q&A Highlights

  • PowerFlex/Pure: Early PowerFlex wins arrived faster than expected; concentrated top‑tier accounts; Pure in early access with GA targeted by year‑end; modest FY’26 revenue contribution expected .
  • Federal vertical: Longer deal cycles and variability persist; overall longer‑term opportunity intact; <~10% of annual revenue historically with seasonal strength in fiscal Q1 .
  • AI maturity: Enterprise AI inferencing is early but accelerating; use cases include fraud/AML and support/summarization .
  • Duration/Revenue timing: Larger multi‑year deals may defer license provisioning and cash collection, affecting timing; embedded in FY’26 guide .
  • ARR methodology: Prospective change in Q1’26 to better align with license availability; historical ARR/NARR differences would have been ≤2% .

Estimates Context

  • Q4’25 actual vs S&P Global consensus: revenue $653.3M vs $643.0M*; non‑GAAP diluted EPS $0.37 vs $0.33*; both beats. EBITDA tracked below consensus on SPGI’s basis (company does not guide/report EBITDA) .
  • Q1’26 revenue guide $670–$680M sits around consensus $676.9M* (midpoint slightly below/inline); FY’26 revenue guide $2.90–$2.94B brackets consensus $2.923B*—implies broadly in‑line setup near consensus on top line .
  • With a slightly lower expected average contract duration and noted OpEx headwinds, Street may modestly recalibrate margin/FCF cadence intra‑year even as FY’26 margin guide (21–22%) exceeds FY’25 actual (21.1%) .

Note: Consensus values retrieved from S&P Global.*

Key Takeaways for Investors

  • Nutanix delivered a clean Q4 beat vs guidance and consensus on revenue and non‑GAAP EPS, with durable FY’25 profitability (21.1% non‑GAAP op margin) and strong FCF (30% margin) supporting the story .
  • Initial FY’26 guide is broadly in line on revenue (mid‑teens growth) with a margin step‑up planned, but with acknowledged duration and OpEx headwinds that could affect intra‑year pacing .
  • External storage strategy is moving from concept to execution (early PowerFlex wins; Pure nearing GA), expanding the TAM and opening large‑account land‑and‑expand vectors .
  • VMware displacement remains a multi‑year tailwind; management characterizes the opportunity as early innings, with increasing MSP/CSP channel focus .
  • Federal vertical variability and NRR moderation (108%) warrant monitoring; ARR methodology change (from Q1’26) should modestly smooth alignment to license availability .
  • Capital returns are increasing (repurchase authorization now $461M), balancing growth investments with dilution management .
  • Trading setup: in‑line FY’26 top‑line guide and early external‑storage traction suggest results‑driven upside remains tied to execution on large‑deal timing, duration mix, and partner ramps.

Tables and figures references:

  • Q4 FY’25 press release/8‑K and financials
  • Q4 FY’25 call transcript (prepared remarks and Q&A)
  • Q3 FY’25 press release/8‑K (for trends and prior guidance)
  • Q2 FY’25 press release (for trends)
  • Share repurchase and FI contract press releases

Consensus estimates (revenue, EPS, EBITDA, target price): Values retrieved from S&P Global.*