Nutanix, Inc. Class A Common Stock 2026 Q4 Earnings Call

Please proceed. Good afternoon, and welcome to today's conference call to discuss fourth quarter fiscal year 2026 financial results.

Joining me today are Rajiv Ramaswami, Nutanix's CEO, and Rukmini Sivaraman, Nutanix's CFO. After the market closed today, Nutanix issued a press release announcing fourth quarter fiscal year 2026 financial results. If you'd like to read the release, please visit the press releases section of our IR website. During today's call, management will be making forward-looking statements, including financial guidance. These forward-looking statements involve risks and uncertainties, some of which are beyond our control, which could cause actual results to differ materially and adversely from those anticipated by these statements.

For a more detailed description of these and other risks and uncertainties, please refer to our SEC filings, including our most recent annual report on Form 10-K and our subsequent quarter reports on Form 10-Q, as well as our earnings press release issued today. These forward-looking statements apply as of today, and we undertake no obligation to revise these statements after this call. As a result, you should not rely on them as predictions of future events. Please note, unless otherwise specifically referenced, all financial measures we use on today's call, except for revenue, are expressed on a non-GAAP basis and have been adjusted to exclude certain charges. We have provided, to the extent available, reconciliations of these non-GAAP financial measures to GAAP financial measures on our IR website and in our earnings press release.

Nutanix will be participating in the Goldman Sachs Communacopia + Technology Conference in San Francisco on September 8th and the Piper Sandler Growth Frontiers Conference in Nashville on September 15th. We hope to see you at these events. Finally, our first quarter fiscal 2027 quiet period will begin on October 17th. With that, I'll turn the call over to Rajiv.

Rajiv? Thank you, Rich, and good afternoon, everyone.

Our fourth quarter was a strong finish to our fiscal 2026 year. We saw strength across our business and are happy to have exceeded all of our guided metrics for the quarter. We saw strong uptake of our external storage offerings and Nutanix Cloud Clusters, or NC2, in the quarter. Both of which are helping to mitigate the impact of ongoing supply chain challenges on our customers. We also saw good performance from our portfolio products, with notable strength in our Kubernetes and database management offerings. Turning to our full year results. In our fiscal 2026, we demonstrated good progress on a number of fronts. Despite increased hardware prices and supply shortages, we delivered solid top-line performance, including revenue of $2.85 billion, up 12% year-over-year, and ARR of $2.55 billion, which grew 16% year-over-year.

We also saw strong new logo performance across all of our customer tiers, including the Global 2000, adding over 3,000 new customers. Finally, we generated free cash flow of $841 million, yielding a free cash flow margin of 29%. We are pleased to have delivered our third year in a row with a Rule of 40 score above 40. In FY 2026, we also saw tangible progress on the product and partnership fronts, especially as it relates to AI and our support for external storage. We delivered Nutanix Agentic AI, a full stack software solution designed to reduce complexity, optimize performance and security, and enable lower and more predictable token costs for Agentic AI applications. On the partnership front, we signed a strategic agreement with AMD to deploy our Agentic AI platform on AMD's GPU solutions. This partnership complements our existing integration with NVIDIA's GPU solutions.

It also includes broadening our support for AMD CPUs, ensuring that our customers have maximum flexibility for both GPU and CPU-based solutions. We also announced new capabilities for our Agentic AI solution to support a new generation of AI cloud providers, or NeoClouds, opening up a new market opportunity for us. Our partnership with ChronoScale, announced last week, represents some early success for us in this market. More recently, we have announced important new capabilities for our Agentic AI solution. These include Nutanix Agent Gateway, which provides unified governance and cost control over AI spend to our customers, and a Model Context Protocol server for the Nutanix Cloud Platform, which brings secure natural language Agentic AI automation to hybrid multicloud environments. Finally, we made good progress on our initiative supporting the use of external storage with the Nutanix Cloud Platform.

In FY 2026, we added solutions supporting Dell PowerStore, which became generally available earlier this month, and Everpure, which has been generally available for approximately two quarters. We also announced agreements to support NetApp and Lenovo's storage platforms. Notably, our solution supporting NetApp is currently in limited availability and was instrumental in the signing of several large wins in Q4. I would now like to highlight a few of our largest and most notable wins in Q4. These wins demonstrate the appeal of our platform to businesses that are looking to adopt hybrid multicloud operating models and deploy modern applications and AI. Increasingly, to deploy our cloud platform while retaining their existing hardware, including servers and external storage. We saw strong momentum with our initiative to support external storage in Q4, which included a sharp quarter-over-quarter increase in bookings and the signing of several seven-figure ACV deals.

These included one of our largest wins of the quarter, a new logo with a Global 2000 aerospace, defense, and security provider that was looking to modernize its IT environment. This customer chose the Nutanix Cloud Platform, along with Nutanix Cloud Manager, based on its lower total cost of ownership, ease of migration, and ability to utilize their existing NetApp storage. We also had a seven-figure new logo win with one of the premier hospital systems in North America that was unhappy with the renewal terms they received from their existing infrastructure provider. This customer chose the Nutanix Cloud Platform to run their business-critical applications and plans to utilize their existing Dell PowerFlex storage arrays going forward. We are pleased with the progress we have seen to date with our offering supporting external storage and expect continued momentum on this front in FY 2027.

Some of our marquee wins in the quarter also reflected the strength we saw with our portfolio products. An example is another one of our largest wins in the quarter with a Global 2000 financial services provider in the APJ region. With this multi-product expansion, the customer now plans to use Nutanix Kubernetes Platform to deploy and manage their container-based applications while continuing to run their VM-based applications on our cloud platform. They also plan to extend their use of Nutanix Database Service to automate the management of their Oracle databases. We continue to see adoption of our AI solution in Q4, with wins across a broad array of industry verticals in both civilian and government markets. Finally, in Q4, we saw continued momentum with NC2, our public cloud offering. This included a strong quarter-over-quarter increase in bookings and cores deployed.

One seven-figure NC2 win was an expansion with a Global 2000 provider of financial services based in North America. This customer was already using the Nutanix Cloud Platform and Cloud Management to run some of their business-critical workloads on-prem. However, they were looking to shift a portion of their estate to the public cloud and automate the management of their SQL databases. To address these requirements, they plan to deploy Nutanix Database Service on NC2 running on AWS. We also landed a new logo with an EMEA-based provider of automotive technology. This customer was looking to exit their data centers, avoid lock-in with their existing on-prem vendor, and switch from a CapEx to an OpEx model. They plan to deploy our cloud platform on NC2 in OVHcloud public cloud. In closing, we were pleased with the broad-based strength we saw in our business in Q4.

Our opportunities with AI, modern applications, hybrid multicloud, and support for external storage provide us with a strong foundation for long-term growth. Finally, I would like to express my sincere gratitude to our investors, customers, and partners for their trust in us, and to our employees for their hard work that led to these results. With that, I will hand it over to Rukmini Sivaraman.