Nutanix delivered significant operating leverage in its fiscal fourth quarter of 2026, as both revenue and annual recurring revenue increased 16%, while profitability and free cash flow grew much faster.
Annual recurring revenue reached $2.55 billion, up from $2.20 billion a year earlier.
Quarterly revenue increased 16% to $757.1 million from $653.3 million.
The results reflected continued demand for Nutanix’s hybrid multicloud infrastructure platform as the company expanded customer relationships, strengthened strategic partnerships and increased its focus on AI-related workloads.
Profitability improved sharply.
GAAP operating income more than doubled to $70 million from $31.2 million in the prior-year quarter.
GAAP operating margin expanded 440 basis points to 9.2% from 4.8%.
The improvement was even more pronounced on a non-GAAP basis.
Non-GAAP operating income increased to $198 million from $119.5 million, representing growth of approximately 66%.
Non-GAAP operating margin expanded 790 basis points to 26.2% from 18.3%.
That margin expansion indicates Nutanix converted a substantially larger share of incremental revenue into operating profit.
Faster operating income growth than revenue also shows increasing scalability in the company’s subscription-oriented business model.
Cash generation strengthened as well.
Free cash flow increased to $277.6 million from $207.8 million a year earlier.
Operating cash flow reached $315 million during the quarter.
The higher free cash flow gives Nutanix additional flexibility to invest in product development, expand partnerships and support AI infrastructure initiatives while maintaining a stronger financial position.
Nutanix has continued transitioning toward a recurring revenue model built around software and subscription relationships.
The increase in ARR to $2.55 billion provides the company with greater visibility into future revenue and reflects the growing installed base of customers using its platform.
Annual recurring revenue increased by approximately $350 million year-over-year.
That expansion provides an important foundation for continued growth because existing customers can increase spending as they adopt additional Nutanix products, expand deployments or move more workloads onto the platform.
Nutanix added more than 3,000 customers during fiscal 2026, further expanding its global customer base.
Customer additions remain an important growth driver because hybrid cloud infrastructure is often deployed initially for a particular workload or business unit before expanding into broader enterprise environments.
Once organizations standardize on an infrastructure platform, opportunities can emerge to extend the technology across additional applications, data centers, cloud environments and geographic locations.
Nutanix positions its platform as an alternative to managing separate infrastructure stacks across private data centers and public clouds.
The company’s software is designed to provide a common operational layer for applications and data across different infrastructure environments.
That approach can become more valuable as enterprises pursue hybrid strategies rather than moving every workload into a single public cloud.
Some applications remain in private data centers because of performance, cost, regulatory or security requirements, while others are deployed in public cloud environments.
Nutanix seeks to give IT organizations a consistent way to manage those workloads across multiple locations.
The company also expanded several important technology partnerships during the year.
Nutanix highlighted deeper relationships with AMD, Lenovo, NetApp and NVIDIA.
Those partnerships broaden the hardware, storage and computing options available to customers deploying Nutanix software.
The relationship with NVIDIA is becoming particularly relevant as AI workloads increase demand for GPU-powered infrastructure.
Organizations developing generative AI and other advanced applications require substantial computing resources, but many enterprises also want flexibility regarding where AI workloads are deployed.
Sensitive data, regulatory requirements and cost considerations can lead companies to run some AI systems within private or hybrid environments rather than relying entirely on public cloud infrastructure.
That creates an opportunity for Nutanix to position its platform as infrastructure for enterprise AI workloads.
AI is becoming an increasingly visible part of the company’s product strategy.
Nutanix continues expanding Nutanix Enterprise AI, which is intended to simplify the deployment and operation of AI applications across enterprise infrastructure.
The company also launched an MCP server designed to support agentic AI automation.
Model Context Protocol technology can allow AI agents and models to interact more effectively with external systems, tools and enterprise data.
By incorporating support for these types of frameworks, Nutanix is seeking to make its infrastructure more useful for organizations moving from basic generative AI experimentation toward automated agent-based applications.
Agentic AI systems can require access to multiple enterprise tools and data sources while also needing secure infrastructure capable of managing models and workloads across different environments.
Nutanix’s hybrid-cloud architecture could provide one layer for managing those deployments.
The company therefore sees AI not simply as a separate software feature but as another class of workload that can increase demand for its infrastructure platform.
Nutanix Enterprise AI can potentially help customers deploy models and applications while the underlying Nutanix platform manages compute, storage and infrastructure resources.
That positioning gives the company exposure to enterprise AI spending without requiring it to compete directly in the development of foundational AI models.
Instead, Nutanix can provide the infrastructure on which those models and applications operate.
The company’s partnerships with semiconductor and infrastructure vendors strengthen that approach.
AMD can provide processor technology, NVIDIA provides GPU and AI computing capabilities, Lenovo adds enterprise hardware and systems, and NetApp expands storage options.
Combining those technologies with Nutanix software gives customers a broader range of choices when constructing hybrid and AI infrastructure.
The fiscal fourth-quarter results suggest that Nutanix is expanding these capabilities while simultaneously improving its financial efficiency.
Revenue increased 16%, but non-GAAP operating income increased much faster, rising to $198 million from $119.5 million.
The 790-basis-point increase in non-GAAP operating margin to 26.2% was one of the most notable financial developments of the quarter.
Similarly, GAAP operating margin nearly doubled from 4.8% to 9.2%.
The improvement indicates that Nutanix’s existing cost structure is supporting a larger revenue base without expenses increasing at the same rate.
Free cash flow growth provides another indication of the company’s improving economics.
The $277.6 million generated during the quarter was approximately $70 million higher than a year earlier.
Strong cash generation can be especially valuable for technology companies because it allows them to continue funding research and development while preserving strategic flexibility.
Nutanix enters fiscal 2027 expecting further revenue growth and substantial free cash flow.
The company forecasts fiscal 2027 revenue between $3.18 billion and $3.23 billion.
At the midpoint, that implies approximately $3.205 billion of annual revenue.
Nutanix expects a full-year non-GAAP operating margin of approximately 24% to 25%.
The company also projects free cash flow between $850 million and $950 million.
At the midpoint, the free cash flow outlook implies approximately $900 million for the year.
That level of cash generation would give Nutanix considerable resources to fund product development and other strategic priorities.
The operating margin guidance also suggests that management expects the company to maintain much of the profitability improvement achieved as the business has scaled.
While the fourth-quarter non-GAAP margin of 26.2% was above the full-year fiscal 2027 guidance range, the outlook still represents a strong level of profitability for a business continuing to invest in growth.
The combination of rising ARR, customer additions and stronger partnerships provides multiple potential drivers for the next fiscal year.
Nutanix can grow by adding customers, expanding existing deployments and increasing its role in emerging infrastructure categories such as enterprise AI.
The company’s recurring revenue base also means that incremental growth is being layered on top of more than $2.5 billion of existing ARR.
That scale can create significant operating leverage if renewal rates remain strong and customer expansion continues.
The fiscal fourth quarter therefore demonstrated progress across both growth and profitability.
ARR increased 16% to $2.55 billion, revenue increased 16% to $757.1 million and more than 3,000 customers were added during the fiscal year.
At the same time, GAAP operating income more than doubled, non-GAAP operating margin expanded to 26.2% and free cash flow increased to $277.6 million.
Nutanix is now attempting to build on that financial momentum by expanding its role in hybrid-cloud infrastructure and AI.
The launch of its MCP server and continued development of Nutanix Enterprise AI demonstrate how the company is adapting its platform for a new generation of workloads.
With partnerships spanning AMD, Lenovo, NetApp and NVIDIA and fiscal 2027 revenue expected to exceed $3.18 billion, Nutanix enters the new fiscal year with a larger recurring-revenue base, substantially stronger margins and growing exposure to enterprise AI infrastructure demand.
KEY QUOTES:
“Our fourth quarter was a strong finish to fiscal 2026, a year in which we delivered solid top and bottom line performance.”
Rajiv Ramaswami, Chief Executive Officer of Nutanix
