Street Calls of the Week
Introduction & Market Context
Nutanix Inc. (NASDAQ:NTNX) presented its fourth quarter and full fiscal year 2025 earnings results on August 27, 2025, showcasing strong performance across all key metrics. The cloud computing company reported significant revenue growth and margin expansion, driving its shares up 2.2% in after-hours trading to $69.82.
The company’s presentation highlighted its continued momentum in the competitive cloud infrastructure market, where Nutanix has been successfully positioning itself as a leader in hybrid cloud solutions. With a market capitalization of $18.71 billion, Nutanix demonstrated its ability to balance robust growth with improving profitability.
Quarterly Performance Highlights
Nutanix delivered impressive results for Q4 FY2025, exceeding guidance across all metrics. Revenue reached $653.3 million, representing a 19% year-over-year increase and surpassing the company’s guidance range of $635-645 million. The non-GAAP operating margin expanded significantly to 18.3%, up 540 basis points year-over-year and well above the guided range of 15.5-16.5%.
As shown in the following financial summary from the presentation:
The company reported non-GAAP net income per share of $0.37, an increase of $0.14 compared to the same period last year. Annual Recurring Revenue (ARR) grew to $2.22 billion, up 17% year-over-year, while the average contract duration increased slightly to 3.2 years.
CEO Rajiv Ramaswami commented on the quarter’s performance: "The fourth quarter was a good finish with high-teens top line growth and over 2,700 new customers added," highlighting the company’s continued market expansion.
Detailed Financial Analysis
Nutanix’s Annual Recurring Revenue has shown consistent growth over the past nine quarters, reflecting the company’s successful transition to a subscription-based business model. The following chart illustrates this steady upward trajectory:
For the full fiscal year 2025, Nutanix reported revenue of $2.54 billion, an 18% increase year-over-year. Free cash flow reached $750 million, up 26% compared to FY2024, representing a robust 30% margin. This combination of 18% revenue growth and 30% free cash flow margin resulted in a Rule of 40 score of 48, demonstrating the company’s ability to balance growth and profitability.
CFO Rukmini Sivaraman emphasized this balance in her commentary: "Fiscal 2025 demonstrated a good balance of top and bottom line performance with 18% year-over-year revenue growth and strong free cash flow generation, leading to a Rule of 40 score of 48."
The company’s customer base continued to expand throughout the fiscal year, with over 2,700 new customers added in FY2025. The following chart shows the steady growth in Nutanix’s cumulative customer count:
Strategic Initiatives & Partnerships
The presentation highlighted Nutanix’s continued innovation across its cloud platform and strategic partnerships with major technology players. The company mentioned collaborations with AWS, Pure Storage, NVIDIA, and Google, which are expected to strengthen its market position and expand its solution offerings.
Nutanix’s NKP solution received recognition from industry analysts, with both Forrester and Gartner acknowledging the company’s technological capabilities. This external validation supports Nutanix’s competitive positioning in the hybrid cloud infrastructure market.
In a move to enhance shareholder value, the Board of Directors authorized an increase of $350 million to the company’s share repurchase program, reflecting confidence in Nutanix’s financial strength and future prospects.
Forward-Looking Statements
Looking ahead to fiscal year 2026, Nutanix provided optimistic guidance, projecting revenue between $2.90 billion and $2.94 billion, representing approximately 15% growth at the midpoint. The company expects further margin expansion, with non-GAAP operating margin projected to reach 21-22%.
The guidance for Q1 FY2026 indicates continued momentum, with revenue expected between $670 million and $680 million and non-GAAP operating margin between 19.5% and 20.5%, as shown in the following slide:
For the full fiscal year 2026, Nutanix anticipates free cash flow between $790 million and $830 million, building on its strong cash generation capabilities:
The company’s forward-looking statements suggest confidence in its ability to maintain growth momentum while continuing to improve profitability metrics. Nutanix’s strategic focus on expanding partnerships, enhancing its cloud platform through innovation, and growing its customer base positions the company well for sustained performance in the competitive cloud infrastructure market.
With its strong Q4 and full-year results, coupled with positive guidance for FY2026, Nutanix demonstrates its continued evolution as a key player in the enterprise cloud computing space, successfully balancing growth and profitability while expanding its technological capabilities and market reach.
Full presentation:
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