Nutanix, Inc. (NTNX)

Nutanix operates in the intensely competitive cloud infrastructure, platform services, and enterprise AI markets, competing with a broad range of companies that sell software and hardware to build and operate private clouds, integrated systems, standalone storage and servers, and platforms supporting modern and agentic AI workloads, as well as cloud services providers and managed service providers. The markets are characterized by constant change, rapid innovation, and evolving licensing and consumption models. Competition generally varies by workload and customer segment, and customers often evaluate multiple alternatives simultaneously. The company believes the principal competitive factors include platform features and capabilities, including AI capabilities and security; system scalability, performance and resiliency; the ecosystem of certified applications, services, and solutions; management and operations; total cost of ownership; customer freedom of choice and interoperability; the ability to compete with incumbent vendors; application mobility; and quality of customer experience.

Nutanix faces competition from software providers offering virtualization, containerization, agentic AI, virtual networking and security, software defined storage, and infrastructure and management products, such as VMware by Broadcom, Microsoft, and Red Hat; providers of public cloud infrastructure and SaaS-based offerings, such as AWS, Google Cloud, Oracle Cloud, and Azure; and traditional IT systems vendors, such as Dell, Everpure, Inc., Fujitsu, HPE, Hitachi Vantara, Lenovo, Inc., NetApp, Inc., and Huawei Technologies Co., Ltd. The company believes it is positioned favorably against competitors based on principal competitive factors, but many competitors have substantially greater financial, technical and other resources, greater brand recognition, larger sales forces and marketing budgets, a larger existing customer base, broader distribution, and larger and more mature intellectual property portfolios. The company believes its opportunity to increase market share has grown since VMware was acquired by Broadcom in November 2023, as Broadcom's changes to VMware's product portfolio, pricing, partner programs, support models, certification requirements and other aspects of the ecosystem have led many VMware customers to evaluate, adopt or consider alternatives.

Nutanix operates a subscription-based business model, meaning its products, including associated support and maintenance arrangements, are sold with a defined duration. The business is organized into a single operating and reportable segment. The Nutanix Cloud Platform is designed to enable organizations to build hybrid cloud infrastructure, providing a consistent cloud operating model with a single platform for running and managing applications, agentic AI workloads, and data in core data centers, at the edge, and in public clouds. The company generates revenue primarily through subscription term-based licenses, which are sold separately and typically have durations ranging from one to five years, and cloud-based SaaS subscriptions with durations extending up to five years. The company has end customers across a broad range of industries, including financial services, retail, manufacturing, public sector, automotive and other transportation, consumer goods, education, energy, healthcare, media, technology, and telecommunications, and also sells to service providers. As of July 31, 2026, the company had a broad and diverse base of over 32,000 end customers.

The Nutanix Cloud Platform includes Nutanix Cloud Infrastructure (NCI), a distributed hyperconverged infrastructure (HCI) for enterprise IT applications that combines compute, storage, and networking resources from a cluster of servers into a single logical pool with integrated resiliency, security, performance, and simplified administration. NCI includes Nutanix AOS, the scale-out storage technology; Nutanix AHV, the enterprise hypervisor; Nutanix Data Services for Kubernetes; Nutanix Disaster Recovery; Flow Network Security; Flow Virtual Networking; Nutanix Cloud Clusters (NC2), which extends the platform to public clouds; Nutanix Central; Nutanix Service Provider Central; and Nutanix Prism. NCI also supports qualified external storage systems, including Dell Technologies PowerFlex and PowerStore platforms and Everpure, Inc. FlashArray storage systems, with support for NetApp ONTAP-based and Lenovo ThinkSystem external storage integrations announced, and the NetApp ONTAP-based solution currently available through limited-availability programs.

Nutanix Cloud Manager (NCM) is a unified management solution providing intelligent operations, self-service and orchestration, security compliance and visibility, and control of cloud costs, including NCM Intelligent Operations, NCM Self-Service and Orchestration, NCM Cost Governance, and Nutanix Security Central. Nutanix Kubernetes Platform (NKP) is an enterprise Kubernetes platform for deploying and managing modern, containerized applications across hybrid multicloud environments, with NKP Metal currently available through an early access program. Nutanix Enterprise AI (NAI) is a centralized fine-tuning and inferencing platform providing AI developers and infrastructure managers with access to models and AI services, with built-in resource management, control and governance capabilities, and includes Nutanix Agent Gateway and Nutanix Private Inferencing. Nutanix Unified Storage (NUS) is a software-defined platform that consolidates file, object, and block storage into one intelligent data fabric, including Nutanix Files Storage, Nutanix Objects Storage, Nutanix Volumes Block Storage, and Nutanix Data Lens. Nutanix Database Service (NDB) is a platform that automates management of diverse database environments with database-as-a-service functionality across on-premises and public cloud environments.

The company's top two distributors to its end customers represented 47%, 41% and 39% of total revenue for fiscal 2024, 2025 and 2026, respectively. The company has established relationships with channel, OEM, ecosystem, cloud, and external storage partners, including Cisco, Dell, Fujitsu, HPE, and Lenovo as OEM partners, and strategic technology partnerships with Advanced Micro Devices, Inc., Citrix Systems, Inc., Intel Corporation, NVIDIA Corporation, Omnissa, LLC, and Palo Alto Networks, Inc. The company does not manufacture any hardware; the Nutanix-branded NX series hardware platforms are manufactured by Super Micro Computer, Inc. (Supermicro), and as of July 31, 2026, the company had approximately $163.0 million in the form of guarantees to its contract manufacturer related to certain components. The company announced a reduction in force in August 2026, and as of July 31, 2026, had approximately 8,350 employees worldwide.

In fiscal 2026, subscription revenue accounted for 95% of total revenue, consistent with 95% in fiscal 2025 and up from 94% in fiscal 2024. The company generated GAAP net income in fiscal 2025 and 2026 and non-GAAP net income in fiscal 2024, fiscal 2025, and fiscal 2026. The company derived approximately 45%, 44% and 46% of total revenue from international customers based on bill-to location for fiscal 2024, 2025, and 2026, respectively. As of July 31, 2026, approximately 62% of full-time employees were located outside of the United States. The aggregate market value of the registrant's common stock held by non-affiliates as of January 31, 2026 was approximately $10.4 billion, based upon the closing sale price of such stock on the Nasdaq Global Select Market.

The company intends to continue investing in the Nutanix Cloud Platform through internal innovation and product development to enable customers to run traditional, modern and AI workloads and manage data and applications across hybrid multicloud environments. Product priorities include core hybrid cloud infrastructure, enterprise AI, Kubernetes and modern applications, database services, expanded infrastructure choice (including expanded server support and support for qualified external storage), and continued investments in the portfolio to support the broader partner ecosystem. The company may also pursue strategic partnerships, technology investments and selective acquisitions where they can accelerate product development or expand platform capabilities.

The company intends to continue to grow its customer footprint through targeted investments in sales and marketing and its channel, OEM, cloud and ecosystem partnerships, believing that broader support for server and storage infrastructure, together with cloud-native, Kubernetes and enterprise AI capabilities, increases the range of customer environments, workloads and modernization initiatives that the platform can address. The company plans to continue deepening relationships with channel, OEM, technology, cloud, silicon, service provider, and neocloud partners and expand its partner ecosystem globally to broaden the availability and capabilities of the Nutanix Cloud Platform. The company also expects to continue leveraging relationships with channel and OEM partners, deepening relationships with cloud and ecosystem partners, and expanding strategic engagements with service providers and neoclouds to reach end customers.

The company intends to continue to invest in its growth while balancing such growth against operating expenses, believing it can sustain profitable growth. Key drivers of profitable growth include landing new customers, a growing base of renewals, expansions with existing customers, leveraging the partner and alliance ecosystem, and a continued focus on improving operational efficiencies across sales, marketing, and research and development. The company intends to reduce its overall sales and marketing spend as a percentage of revenue. The company also expects to continue investing in global research and development teams to support enhancements to solutions, improve integration with ecosystem partners, and expand the range of technologies and features available through the platform, although these investments may result in increased expenses and adversely affect profitability in the near term.

The company plans to dedicate significant resources to continued research and development efforts and intends to continue investing in global research and development teams. The company expects to continue making targeted investments in sales and marketing functions, including initiatives focused on opportunities with major accounts, large deals, and commercial accounts, as well as other initiatives to increase pipeline growth and support customer adoption of broader platform capabilities. The company also expects to continue investing in initiatives that support the growth of the business, including the development of solutions and sales and marketing efforts aimed at capitalizing on market opportunities, while also focusing on driving operational efficiencies and prioritizing resources across the business, including in go-to-market functions.

The company expects that its cash, cash equivalents and short-term investments, available borrowing capacity under its revolving credit facility, and expected net cash provided by operating activities will be sufficient to meet its anticipated cash needs for at least the next 12 months. The company's capital allocation priorities include expectations regarding share repurchases, strategic investments, capital expenditures and other uses of cash. The company's current intention is not to pay dividends. The company also expects that neither its operating results nor cash flows would be materially affected by any sudden change in interest rates and foreign currency exchange rates.

The company faces risks from adverse or uncertain macroeconomic or geopolitical conditions or reduced IT spending by end customers, which may adversely impact business, revenues and profitability. These conditions include high inflation, elevated interest rates, recessionary pressures, political and social unrest, geopolitical tensions, military conflict, including the ongoing military conflict in Ukraine and continuing conflicts in the Middle East, including the conflict involving Iran, and the imposition or expansion of tariffs, which may increase the cost of IT products and services and thereby reduce available IT budgets or shift spending priorities away from the company's solutions. The company also faces risks from supply chain constraints, including constraints affecting the availability of certain hardware components at manufacturers beginning in the second quarter of fiscal 2026, which have resulted in higher hardware pricing in the market and extended hardware lead times, impacting customers' ability to deploy and consume software and affecting the timing of revenue recognition and cash flows.

The company faces risks related to its ability to capitalize on opportunities resulting from Broadcom's changes to VMware's products, pricing, licensing, business practices and broader ecosystem, as customers may remain subject to multi-year contractual commitments, defer migration until their next hardware or software refresh cycle, or delay migration initiatives due to budgetary, operational or resource constraints. The company also faces risks from its focus on larger enterprise customers and transactions, which may result in longer and less predictable sales cycles, greater costs and pricing pressure, and increased variability in operating results. The company faces risks related to its continued investment in and integration of AI technologies, which are complex, rapidly evolving, and subject to significant uncertainty, including with respect to technical performance, reliability, customer adoption, competitive differentiation, and legal and regulatory frameworks.

The company faces risks related to its reliance on indirect sales channels for the distribution of its solutions, as disruption within these channels or underperformance by channel partners could adversely affect business, operating results and cash flows. The company also faces risks from its dependence on manufacturers of hardware and physical components, including OEM partners, to timely and cost-effectively produce and ship the hardware platforms on which its software runs, and is susceptible to supply chain disruptions, delays, quality events, and pricing fluctuations. The company faces risks related to its international operations, including political, economic and social instability, changes in global trade policies, tariffs, sanctions, import and export restrictions, and requirements to comply with foreign privacy, data protection and information security laws and regulations.

Management's message emphasizes the company's vision to simplify the deployment and operation of hybrid computing infrastructure and AI factories to support the increasingly distributed landscape of apps and data, including agentic AI, while freeing organizations to modernize their infrastructure and focus on business goals. The mission is to delight customers with an open, secure platform with rich data services that increases their ability to take advantage of technologies such as cloud native and AI, optimizes how they run their organizations today, and accelerates innovation, efficiency, and growth. Key strategic priorities emphasized include expanding the hybrid multicloud platform, landing new end customers and expanding addressable opportunities, expanding within existing end customers through platform selling, driving renewals and retention in existing end customers, leveraging the partner ecosystem, and driving profitable growth. Management also emphasizes a continued focus on improving operational efficiencies across sales, marketing, and research and development, and intends to reduce overall sales and marketing spend as a percentage of revenue.

Total revenue for fiscal 2026 was $2.9 billion, compared to $2.5 billion in fiscal 2025 and $2.1 billion in fiscal 2024. GAAP net income for fiscal 2026 was $0.3 billion, compared to $0.2 billion in fiscal 2025 and a net loss of $0.1 billion in fiscal 2024. Diluted earnings per share for fiscal 2026 was $1.10, compared to $0.80 in fiscal 2025 and a loss per share of $0.50 in fiscal 2024. Subscription revenue comprised 95% of total revenue in fiscal 2026, 95% in fiscal 2025, and 94% in fiscal 2024. The company generated positive free cash flow in fiscal 2026, with operating cash flow of $0.6 billion and capital expenditures of $0.1 billion. As of July 31, 2026, the company had cash, cash equivalents, and short-term investments of $1.8 billion and total debt of $1.5 billion, including convertible senior notes. The company's gross margin for fiscal 2026 was 85%, compared to 84% in fiscal 2025 and 83% in fiscal 2024. Operating margin for fiscal 2026 was 12%, compared to 8% in fiscal 2025 and 2% in fiscal 2024. The company's top two distributors to its end customers represented 39% of total revenue for fiscal 2026, 41% for fiscal 2025, and 47% for fiscal 2024.

The company faces significant risks from adverse macroeconomic conditions, including high inflation, elevated interest rates, recessionary pressures, and geopolitical tensions, which may reduce IT spending and delay or cancel purchasing decisions. Supply chain constraints, including hardware component shortages beginning in the second quarter of fiscal 2026, have resulted in higher hardware pricing and extended lead times, impacting revenue recognition and cash flows. The company's reliance on indirect sales channels is a key risk, as its top two distributors represented 39% of total revenue in fiscal 2026, and disruption or underperformance by channel partners could adversely affect results. The company also faces risks from its dependence on manufacturers, particularly Supermicro, for hardware platforms, with approximately $163.0 million in guarantees to its contract manufacturer as of July 31, 2026. Additionally, the company's ability to capitalize on opportunities from Broadcom's changes to VMware's ecosystem is uncertain, as customers may defer migrations due to contractual commitments or resource constraints.