Nutanix Q4 Revenue Jumps 19 Percent

Nutanix(NASDAQ:NTNX) reported fourth quarter 2025 results on August 27, 2025, with GAAP revenue of $653 million (up 19% YoY), free cash flow of $208 million, and annual recurring revenue (ARR) of $2.22 billion (up 17% YoY). Fiscal year 2025 revenue reached $2.54 billion (up 18% YoY), and non-GAAP operating margin improved to 21.1%. The following insights examine Nutanix's external storage partnerships, AI and multi-cloud product differentiation, and evolving customer expansion dynamics.

External storage partnerships expand Nutanix’s reach

In fiscal year 2025, Nutanix launched integration with Dell PowerFlex and advanced its partnership with Pure Storage, targeting enterprises with significant external storage needs. Early access for Pure Storage integration is underway, with general availability expected by year end, and initial wins with Dell PowerFlex included two Global 2,000 customers.

"Finally, we made progress on a strategic decision to enable customers to utilize their existing external storage hardware. The Nutanix Store platform now supports both HCI and external storage, and we delivered our first version of this new capability supporting Dell PowerFlex. We also announced a new partnership with Pure Storage to support their flash array. This offering recently entered early access and remains on track to be generally available by the end of this calendar year."
— Rajiv Ramaswamy, President and CEO

This strategic expansion into external storage broadens Nutanix’s addressable market and positions the company to win large enterprise deals from customers seeking to modernize infrastructure while preserving legacy investments.

AI and multi-cloud drive Nutanix platform differentiation

Nutanix enhanced its product portfolio by releasing GPT in a Box 2.0 and deepening integration with NVIDIA AI Enterprise, while also adding public preview support for Google Cloud. These moves follow prior partnerships with AWS and Azure, and aim to capture early enterprise adoption of private AI and hybrid cloud workloads.

"We enhanced the Gen AI capabilities of our platform with the release of GPT in a Box 2.0 and delivered an enhanced version of Nutanix Enterprise AI that includes a deeper integration with NVIDIA AI Enterprise. We also extended the hybrid multi-cloud capabilities of our platform by adding support for Google Cloud, which is now in public preview."
— Rajiv Ramaswamy, President and CEO

By addressing security-sensitive use cases and enabling modern application workloads across multiple clouds, Nutanix strengthens its competitive position as a foundational platform for enterprise AI and hybrid cloud adoption.

Nutanix customer expansion dynamics shift with larger deals

During fiscal year 2025, Nutanix added over 2,700 new customers, including more than 50 Global 2,000 accounts, and saw a 60% increase in million-dollar-plus land and expand transactions. Management noted that larger initial deal sizes may impact future expansion rates within these accounts due to a higher starting baseline.

"We've seen the average deal size of our new logos increasing over the last few years. Which can also potentially be a headwind for the growth rate of expansion within those customers because their initial deal size has been larger than it has been historically for us. And then the last point is around more of a numerical kind of law of large numbers point, which is that as ARR has grown every quarter for us, the ACV dollars required to offset a point of churn increases even at the same churn percentage. Which could make it increasingly challenging to achieve the same NRR over time."
— Rukmini Sivaraman, CFO

As Nutanix’s customer base and contract values scale, sustaining high net revenue retention (NRR) will become more challenging, increasing the importance of new customer acquisition and cross-selling new platform capabilities for continued ARR growth.

Looking Ahead

Management guided fiscal year 2026 revenue to $2.9 billion to $2.94 billion (15% YoY growth at midpoint), non-GAAP operating margin of 21%-22%, and free cash flow of $790 million to $830 million (27.7% margin at midpoint). Guidance reflects macroeconomic uncertainty, public sector variability, and a gradual increase in contributions from Dell and Pure Storage partnerships, with new customer additions expected at mid to high three-digit levels per quarter. ARR calculation methodology will be updated in the first quarter of fiscal year 2026 to align with license delivery timing, with historical differences under 2%.

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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool recommends Nutanix. The Motley Fool has a disclosure policy.