Nutanix Beats Q4 Estimates, Guides FY27 Above Street
Nutanix (NASDAQ: NTNX) delivered a strong fiscal fourth-quarter performance on Wednesday, August 26, 2026, beating analyst expectations on revenue, earnings, and free cash flow. The company also issued fiscal 2027 guidance that brackets the consensus estimate, signaling sustained momentum in its subscription-led hybrid cloud business.
Revenue and EPS Surge Past Expectations
For the quarter ended July 31, 2026, Nutanix reported revenue of $757.1 million, up 16% year-over-year and ahead of the $738 million consensus. Adjusted earnings per share came in at $0.60, versus the $0.49 expected, reflecting strong operational leverage.
The company’s non-GAAP operating margin expanded to 26.2%, up 790 basis points from the prior-year period, while non-GAAP operating income jumped 66% to $198.0 million. These figures underscore Nutanix’s ability to convert top-line growth into profitability.
ARR Hits $2.55 Billion, Customer Adds Top 3,000
Annual recurring revenue (ARR) reached $2.55 billion, up 16% year-over-year. Management noted on the earnings call that the company added more than 3,000 new customers during the quarter, bringing its total customer base to over 24,000.
The ARR growth, coupled with a 34% year-over-year increase in free cash flow to $277.6 million (well above the $198 million estimate), signals that Nutanix’s shift to a subscription model is paying off. Free cash flow margin improved to 36.7% of revenue, up from 30.6% a year ago.
FY27 Guidance: Revenue and Margins Point to Continued Expansion
For fiscal 2027, Nutanix expects revenue in the range of $3.18 billion to $3.23 billion, compared to the $3.2 billion consensus. The midpoint implies roughly 14% growth over fiscal 2026’s projected revenue, a slight deceleration from the 16% growth in fiscal 2026 but still robust.
More striking is the company’s non-GAAP operating margin guidance of 24% to 25%, a significant step up from the 22.7% margin achieved in fiscal 2026. Free cash flow is projected between $850 million and $950 million, implying a margin of 27% to 29%—a sign that Nutanix is prioritizing profitability and cash generation.
Q1 Outlook: Solid Start to FY27 Expected
For the first quarter of fiscal 2027, Nutanix guided revenue to $755 million to $765 million, roughly in line with the $755 million consensus. Non-GAAP operating margin is expected to be 26% to 28%, reflecting continued cost discipline.
Weighted average shares outstanding are projected at approximately 294 million, which would support EPS growth as the company continues to buy back stock.
Why This Matters for the Hybrid Cloud Market
Nutanix’s results come at a time when enterprises are increasingly consolidating their IT infrastructure. The company’s ability to grow ARR while expanding margins suggests it is taking share from legacy players like VMware (which is being acquired by Broadcom) and Dell Technologies.
With over 3,000 new customers added in the quarter, Nutanix is clearly expanding its footprint beyond its core hyperconverged infrastructure base into areas like database management and file storage. The company’s focus on hybrid multi-cloud solutions positions it well as organizations seek to balance on-premises and public cloud workloads.
What to Watch: FY27 Margin Trajectory and Customer Growth
Investors should keep an eye on Nutanix’s ability to sustain its non-GAAP operating margin expansion in the 24-25% range for FY27, especially as it invests in sales and marketing. The company’s guidance implies a modest sequential dip in Q1 margins to 26-28%, but any upside surprise would be bullish.
Also watch the pace of new customer additions. If Nutanix can continue to add over 3,000 customers per quarter, its ARR growth should remain in the mid-teens. The next key checkpoint will be the Q1 FY27 earnings report, expected in late November 2026, where management’s commentary on deal flow and competitive wins will be critical.
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