Nutanix, Inc.

Q3 fiscal 2026 revenue was $703 million, above guidance of $680 million to $690 million. ARR ended at $2.435 billion, up 15% year over year, and NRR was 106%. Non-GAAP gross margin was 87.8%; non-GAAP operating margin was 22.3%, versus guided 16% to 17%; non-GAAP net income was $136 million, or $0.47 per diluted share; GAAP net income was $72 million, or $0.25 per diluted share. Free cash flow was $197 million, with a 28% margin. For Q4, Nutanix guided revenue to $725 million to $745 million and non-GAAP operating margin to 21% to 23%. For fiscal 2026, it raised guidance to revenue of $2.82 billion to $2.84 billion, non-GAAP operating margin of approximately 22.5%, and free cash flow of $760 million to $780 million.

Rajiv Ramaswami said demand stayed healthy, driven by customers modernizing IT, adopting hybrid cloud, and deploying cloud-native and AI applications. He emphasized that customer choice across server vendors, public cloud via NC2, and external storage support is helping Nutanix navigate supply-chain issues and making migrations easier. He also framed external storage, NC2, and AI as key drivers of multiyear growth and reiterated the FY29 mid- to high-teens revenue and ARR growth target model.

Rukmini Sivaraman said Q3 beat the high end of guidance on all metrics, with revenue of $703 million, ARR of $2.435 billion, gross margin of 87.8%, operating margin of 22.3%, and free cash flow of $197 million. She noted cash, cash equivalents and short-term investments of $2.018 billion, up from $1.874 billion in Q2, and said the board increased the share repurchase authorization by $750 million; Nutanix repurchased $50 million of stock and used about $32 million to cover employee tax liabilities tied to RSU vesting. She said full-year FY26 guidance rose because TCV bookings expectations are higher, margins are benefiting from efficiency and hiring timing, and free cash flow guidance increased to $760 million to $780 million.

Analysts focused on supply-chain delays, revenue timing, and whether higher server prices are pushing more customers toward NC2 and external storage options. Management said customers are better navigating the environment, but hardware prices remain elevated and lead times vary from 3 to 4 weeks to 6 months depending on vendor and configuration. They also said Q3 bookings were strong at over 20% on a TCV basis, that longer contract duration and better renewals helped bookings, and that the Middle East made Q4 prudently more conservative. On the product side, Rajiv said external storage traction is early but growing, NC2 is still a minority of the business but growing, and the AMD GPU partnership should see first traction in the second half of FY27.