Nutanix at Goldman Sachs Conference: Aiming for Hybrid Cloud Leadership

On Monday, 08 September 2025, Nutanix (NASDAQ:NTNX) presented at the Goldman Sachs Communicopia + Technology Conference 2025. The company laid out its strategic vision to become a leading infrastructure platform, highlighting both opportunities and challenges in the hybrid cloud and AI sectors. Despite economic uncertainties, Nutanix remains optimistic about its growth prospects, supported by strategic partnerships and a robust product portfolio.

Key Takeaways

• Nutanix aims to lead in the hybrid cloud space, leveraging its position in the Gartner Magic Quadrant.
• The company anticipates a 15% growth for fiscal year 2026, despite slight declines in contract duration.
• Strategic partnerships with Dell and Pure Storage enhance Nutanix’s external storage support.
• Nutanix is capitalizing on VMware’s pricing changes to attract new customers.
• Investment in AI and Kubernetes highlights Nutanix’s focus on innovation and customer value.

Financial Results

• Nutanix clarified its ARR recognition methodology, aligning with when licenses are provided.
• Fiscal 2026 guidance projects approximately 15% growth, influenced by hybrid cloud adoption and HCI deployment.
• The company anticipates a slight year-over-year decline in contract duration, potentially offsetting some growth.

Operational Updates

• Nutanix supports external storage through partnerships with Dell and Pure Storage, addressing 75% of the market using traditional storage.
• Strong new customer momentum is driven by channel enablement and OEM partnerships, with expectations to add mid to high three-digit new logos quarterly.
• With a large addressable market of 200,000 customers, Nutanix’s current base stands at 30,000.

Future Outlook

• Nutanix is investing in portfolio specialist sellers to drive multi-product attach, with Nutanix Kubernetes Platform showing promising growth.
• The VMware disruption presents a multi-year opportunity, as customers seek alternatives to Broadcom.
• Migration from VMware is gradual due to infrastructure stickiness and hardware depreciation cycles.

Q&A Highlights

• Nutanix’s pricing strategy focuses on value rather than competing on price alone, with volume-based pricing for large customers.
• Investment priorities include expanding sales reps, marketing, R&D, and AI development.
• Enterprise AI is in early stages, with successful use cases in support optimization, document summarization, and fraud detection.

In conclusion, Nutanix’s strategic direction and market opportunities were thoroughly discussed at the conference. For a more detailed understanding, refer to the full transcript below.

Full transcript - Goldman Sachs Communicopia + Technology Conference 2025:

Matt, Analyst, GS Communicopia and Technology Conference: Right, I think we’re about ready to get started here. Rajiv, Rukmini, welcome to the GS Communicopia and Technology Conference. Thank you both for being with us today.

Rajiv, Nutanix: Oh, it’s great to be here. Thank you.

Rukmini, Nutanix: Thank you.

Matt, Analyst, GS Communicopia and Technology Conference: Awesome. Rajiv, let’s start with a big picture question. You know, where would you like to see Nutanix in the next five years?

Rajiv, Nutanix: Yeah, I think it’s, you know, for the last many years, since we were founded as a startup way back 15 years ago, we’ve been a pioneer and innovator of HCI, but always been a challenger in the market, playing up against and winning our fair share against large incumbents, whether they be the legacy storage vendors, whether they be companies like VMware and competing against the public cloud. Where we’ve come today and where we’re going is that we’ve now built out what I call a full infrastructure platform, a platform that can run all kinds of applications, existing applications, the new modern applications, AI applications being built in the future. They can be run anywhere, and the data associated with these applications can also be managed anywhere: on-premises, edge, public clouds.

The opportunity I see for Nutanix over the next five years is to become a de facto platform in this area, a leader in this area that companies of all shapes and sizes and organizations trust as a trusted innovation long-term partner that they can run their businesses on and as a leader. Some of the proof points I’d just say that we are pretty happy about is, for example, over the last couple of years, we’ve been named as a leader in Gartner’s distributed hybrid infrastructure Magic Quadrant. What gives me pride is the fact that we are the smallest company to be in that leadership quadrant up against people like AWS and Microsoft, big companies that are out there, and Oracle. Our vision, again, aspirations, I should say, are really to become that de facto platform for companies for applications and data.

Matt, Analyst, GS Communicopia and Technology Conference: That’s a great jumping-off point. Before we dig into some of those pieces, I wanted to talk a little bit about your background. You spent time at Cisco, Broadcom, VMware before landing at Nutanix. Can you tell us a little bit about what you took away from those experiences and how that’s informed your leadership of Nutanix?

Rajiv, Nutanix: Yeah, I’ve learned a fair amount that I think have proven to be quite helpful for my current job. I’ve learned the market dynamics in the space that we operate in quite a bit. I’ve learned what it takes to innovate in this market, what kind of products need to be built, and how to look at what’s happening in terms of the future and anticipate that. I think the businesses that I ran at many of those companies were much bigger than what I’m running today. I’ve learned how to scale. In a lot of these cases, we’ve had to go scale businesses to multiple billions of dollars. I think that notion of what it takes to scale these organizations and execute, I think, is what I’ve brought to the table as well with Nutanix. It’s been a good journey. It’s been five years now, almost.

I’m looking forward to the next five.

Matt, Analyst, GS Communicopia and Technology Conference: That’s great. Now, Rajiv, the debate between private and public cloud has been ongoing for years. From your perspective, what are the enduring advantages of private cloud infrastructure? Why do you believe this remains a resilient and strategic opportunity in today’s landscape?

Rajiv, Nutanix: Yeah, and if anything, I would just say over the last five years, the pendulum has swung back and forth on this. It used to be, five years ago, a lot of CIOs were talking about just going all in on the public cloud. I think the ones that did go in realized that it’s not for everything. There’s a play for the public cloud. Clearly, it’s great for getting new workloads up and running quickly, new apps up and running quickly. It’s like a drug. It’s very easy to consume and get hooked on. It’s very expensive. It’s a very expensive habit. What happens today is that everybody realizes that the private cloud, if it’s properly engineered, can be much more cost-effective. Beyond that, there’s a lot of gravity on data. There’s, for example, concerns around data sovereignty, data locality, privacy, security, and real-time actions.

Now we’re getting into the AI world. The same thing happens with AI. AI is all about the data. Where is that data? Where is the data being generated? Where is it going to be consumed? You’re going to need to run your workloads right there. A lot of data is being generated and consumed in data centers and in the edge and manufacturing sites. If you’re an oil and gas company, exploration sites, et cetera. There’s a lot of action happening on-premises and at the edge as well. Which is why I do believe that this is actually an endearing opportunity for what we call hybrid cloud, which is it’s not one or the other. It’s really both. It’s about being able to manage these applications and data wherever they may be and create that infrastructure that can be flexible. That’s what we are aiming to do at Nutanix.

Matt, Analyst, GS Communicopia and Technology Conference: Why is it that you think that most of the AI workloads today are running on public cloud? Do you inevitably see a situation where some of that gets repatriated back to on-prem?

Rajiv, Nutanix: I don’t think there’s a huge amount of AI workloads. Right now, a lot of action has been on training and building these models. That’s naturally a place public cloud and large compute centers are where you build these models, you get them trained. Where I think it gets much more distributed is when it comes to inferencing and a slew of new applications being built that do AI inferencing. If you look at the market, so far it’s been all about training. On top of that, there’s been software companies that are using some of these AI models, these AI-native companies to go starting to deliver services. That also starts to happen in the public cloud.

As enterprises and organizations start actually using AI to meet their needs on a daily basis, they’re going to find again that, and we’re already seeing this, that they have to do this where the data is. That data, again, a lot of it is on-prem, a lot of it is at the edges. That’s why I think AI, like every other application, will also be a hybrid application.

Matt, Analyst, GS Communicopia and Technology Conference: Very interesting. I want to come back to that as it pertains to Nutanix GPT-in-a-Box. I want to pull Rukmini into the conversation. Rukmini, Nutanix recently reported four key results. It sounds like there may have been a bit of confusion around how to interpret ARR and NRR, given some of the larger, more complex transactions that you guys are now doing, as well as the change in methodology that you guys introduced. Maybe you could clarify for the audience the dynamics at play here.

Rukmini, Nutanix: Yes. The change in methodology that you’re referencing is we proactively decided to align our ARR recognition with when customers are provided with licenses. This is purely a timing adjustment. It’s a proactive thing that we’re doing. The start of new fiscal year seemed like a good time to do it. If you look, we also provided a schedule for investors at the back of our investor deck where you could see both the new and the old methodology very clearly for the last eight quarters so that folks had all the information. We’re also reminding folks that going forward, all of our ARR and associated metrics, NRR, like you mentioned, are going to be based off of the new updated methodology. The starting point for Q1 that folks should think about is the ending ARR for the most recent quarter under the new methodology, right?

Although this is a transition quarter, if you will. I would say that the reason we do this is because, again, it’s aligned with when customers are provided the licenses. It’s more reflective of just how industry practices. It’s purely a matter of timing in terms of the actual fact itself.

Matt, Analyst, GS Communicopia and Technology Conference: Very good. Maybe moving on to kind of fiscal 2026 guidance more broadly, can you walk us through some of the puts and takes that inform the initial guide? How did you balance some of the long-term secular tailwinds versus some of the near-term dynamics you’re contending with, Fed uncertainty, duration headwinds, deal cycle elongation?

Rukmini, Nutanix: Correct. I think a few things. Maybe I’ll start first with what do we see as our long-term growth drivers. That obviously also will continue in fiscal year 2026. The first one is our continued deployment of our HCI architecture, as Rajiv said, which was our pioneering architecture, into legacy environments. The vast majority, we believe, of private environments are still running what we call a legacy three-tier architecture, separate compute, storage, and networking. There’s a big opportunity for us to go in there and displace that with our modern architecture. That’s our bread and butter. We’ve been doing it for years, and we intend to continue to drive that. One tailwind to that growth driver is what is happening in the market from a competitive perspective, which gives us an opportunity here, a multi-year opportunity, really, to accelerate that move.

Think of that as 1A and 1B of our growth drivers. Another one I would bring up here is what Rajiv said earlier in terms of the world becoming more hybrid. He talked about the distributed hybrid infrastructure that Gartner puts out and so on. We think that’s still in early innings, and we have more value to add there. The third driver, I would say, is cloud-native and modern applications, which is addressed by our Nutanix Kubernetes Platform, NKP, which is relatively small and newer for us, but it’s a fairly mature product and platform. We acquired a company about 18 months or so ago that had been in existence for a while, so the technology is quite mature, and now we’re able to take it to market. We’ve had a good year with NKP in fiscal year 2025, and we expect that to grow going forward.

That’s a secular win because we can now bring to our platform the more modern and cloud-native workloads. The last growth driver I’ll say is around our partnerships. We’ve announced a slew of partnerships, and those should be driving more leverage and more incremental top line for us. Those are kind of all the things that are the growth drivers. As you said, there are things that also give us some caution in terms of overall uncertainty in the political, geopolitical environment, U.S. Fed uncertainty because of just how their buying changes of personnel and so on that we’ve also had to bake into the guide, and then contract duration. Our revenue, I think, as you know, is not fully ratable. There’s an upfront component as well that is affected by contract duration, and we expect duration to go down slightly year on year.

Those two will be a bit of an offsetting effect, but that’s all baked into the guide that we gave for fiscal year 2026, which is about 15% growth as a midpoint.

Matt, Analyst, GS Communicopia and Technology Conference: Very helpful color. For Rajiv, one dynamic that’s unique about the partnerships that Rukmini is referencing here is when you think about Dell and Pure Storage, Nutanix is now supporting external storage. You already announced two early wins with PowerFlex, which is pretty exciting considering it’s only been in the market for a couple of months. You talked about what informed this decision to really start supporting external storage. What are the advantages to this approach?

Rajiv, Nutanix: Yeah, I mean, I think for the longest time, our whole approach was we were going to displace external storage with our HCI platform. That still continues to be a big motion for us. Now, if you look at the progress that we’ve achieved against that, in this enterprise market, over the last 15 years, I think HCI has gotten to be maybe 20% to 25% of the overall market. The remaining 75% or 80% is still very much on traditional storage. We will continue to eat into that over time. That’s still very much a core motion. In the past, by the way, there was really no opportunity or no reason to support external storage because, first, the external storage folks viewed us as a competitive threat. Second, there was really not much interest in customers wanting to displace a VMware hypervisor for somebody else.

We didn’t have this opportunity in the past. What’s changed now is the fact that VMware now has raised prices. Therefore, customers are looking for an alternative. They’re also pushing HCI with their VMware Cloud Foundation, which is putting the external storage folks also at risk. They need to partner with somebody else. That’s why we’ve seen this sort of interesting situation in the market where we have customers coming to us, as well as these storage partners coming to us saying, please support. Let’s work this. That was the genesis of us starting out with Dell and then now Pure Storage. I do expect that we’ll do more of these over time.

The rationale for us as we get into this market now is that we can now insert into the broader market with a subset of our offering in a much easier way without requiring customers to make architectural changes. They can continue to deploy the same architecture that they were deploying, use the same hardware that they were working on, and just overlay our software instead of the current software that they had. It’s a much easier migration path for the customer than requiring them to migrate to HCI. I look at this and say, OK, now we can go after that remaining 75%. We can get in the door faster in some of those accounts than we could if we just only had HCI.

Matt, Analyst, GS Communicopia and Technology Conference: Right.

Rajiv, Nutanix: That’s what drove the decision.

Matt, Analyst, GS Communicopia and Technology Conference: Right. Now you can wedge into the legacy three-tier environment, so it’s kind of a two-step motion.

Rajiv, Nutanix: Exactly.

You get in there. Exactly. Over time, we’ll try to keep with the rest of HCI.

Matt, Analyst, GS Communicopia and Technology Conference: What is your confidence rate that inevitably, when these come due for hardware refreshes, you can start to roll those over into full-stack HCI deployments?

Rajiv, Nutanix: Not all of them will roll over. Some portions, some subsets of those, we would be able to roll over into a full stack because this will continue on external storage. Now we have the ability to go figure out and manage across both of these environments. We also have the ability to tier our solution as well from a pricing perspective in terms of a full stack and maybe a subset of the full stack. It just gives us a lot more weapons in our arsenal to go out there and compete.

Matt, Analyst, GS Communicopia and Technology Conference: Yeah, Rukmini, I think one question that’s always on investors’ minds is now that you’re supporting external storage, how do the economics compare relative to a full-stack HCI?

Rukmini, Nutanix: Yeah, as Rajiv said, this is not the full stack in terms of the capability. At the same time, we are providing an option to customers who are looking for an alternative at an important time for them. If you think of the bookends, on one end is what our full-stack offering is offered at, and on the other end is what the main competition, in this case, Broadcom’s VMware, used to have available, which they no longer do, by the way, in terms of the standalone hypervisor solution, which they used to have along with some other capabilities there. Those are the two bookends. For us right now, I think we have some room in terms of where we price around that.

We are trying to balance, and it’s early days, I should say, because, as you said, the solution has just been in the market for a couple of months here. What we’re trying to balance is where there is value for the customer to adopt this solution, but also giving us flexibility and making it a smaller hurdle for them to switch to the full stack when there is an opportunity down the road when they are depreciating their hardware to switch to HCI. We’re balancing a few things there as we think about pricing, and it’s early days. We’re also discovering what the market will bear.

Rajiv, Nutanix: I just want to make one point on that, which is sometimes when people think about this compute offering, they think of it as a hypervisor. It’s actually much more than a hypervisor because if you look at our stack today, we have the compute virtualization. We have the network virtualization. We have the operations. We have Kubernetes. Yes, we also have our own storage. Effectively, the way you should think about the external storage offering is it’s got everything in there except for the built-in storage, right? It is a full stack of compute, network, operations, Kubernetes, all of that is in that stack. It’s much more than a hypervisor.

The customer has the choice of whether to use HCI storage or external storage. As Rukmini pointed out, there’s a big pricing umbrella that we can go work under to make it.

Matt, Analyst, GS Communicopia and Technology Conference: Does that come all bundled, or can they adopt Nutanix Kubernetes Platform down the line?

Rajiv, Nutanix: Yeah, we always want to provide our customers flexibility. Use what you need, not force it upon the customer, not force them to buy stuff they don’t want. For us, it’s all about the customer success and adoption. They have to adopt it, be happy with it, and then they have to renew and expand with that. That’s the motion that we try. We are very focused on what they want and how they can adopt it and be successful.

Matt, Analyst, GS Communicopia and Technology Conference: Very helpful. I want to drill in on the new customer momentum. It’s been very strong for Nutanix for the last several quarters. You’ve been investing quite a bit in channel enablement. You’ve also announced several OEM partnerships. We touched on a few of them. How would you rank the drivers of this accelerated customer momentum? How durable do you believe this is?

Rajiv, Nutanix: Yeah, I think first of all, for us, I would say the first part of it is the fact that we have, as an organization, focused on going and landing new customers from a go-to-market motion in terms of customer programs, partner programs, our own sales force, and incentives for our sellers. We’ve done a lot of that work ourselves. The second, I would say, our channel has certainly contributed. We have a channel-first model, and we have incentives into the channel partners. Many of these channel partners have these as existing customers that may be new to the Nutanix family. We welcome those customers coming in. The third, OEMs, especially Cisco, I would say, has been a good contributor of new logos for us over the past entire year as this is the second year of Cisco with us. I think all three have contributed quite a bit.

Of course, on top of all that is this general notion of many customers wanting to migrate away from Broadcom, VMware. That just provides an overall umbrella under which we are executing.

Matt, Analyst, GS Communicopia and Technology Conference: Very helpful.

Rukmini, Nutanix: I’ll add one thing there. We said on the call that we expect to continue to add mid to high three-digit new logos on a quarterly basis, more or less sustain the number of new logo additions. The growth has been really good in fiscal year 2025. That growth rate, it can be hard to sustain off of what is now a tougher compare. As Rajiv said, there’s lots of reasons why we want to continue to add customers onto our platform.

Rajiv, Nutanix: I’ll just give you a perspective on that. Today, Nutanix has about 30,000 customers. The addressable universe out there is about 200,000 customers. There’s still a lot of companies that we can go try and land.

Matt, Analyst, GS Communicopia and Technology Conference: Great. Nutanix’s product velocity has expanded the scope from infrastructure modernization to really hybrid multi-cloud enablement. How are customers now embracing this broader portfolio in practice? What are some of the most compelling ways they’re adopting more of the platform?

Rajiv, Nutanix: Yeah, I think one of the main things we’ve seen is that the number of use cases within a customer environment has gone up substantially. We used to just be, OK, on-prem HCI, and that was our motion. That was the use case that we were selling. Today, we are selling a much broader platform. They can use this with external storage. They can run their modern applications with Kubernetes. I’m very happy with how that part of the business has grown over the last year. It’s still small, but we’re doing well there, and we expect to continue growing that portion of the business. They can use this on-prem as well as on top of public clouds. We’ve seen some initials, I mean, we’ve had that in the market for quite a while with AWS and Azure. We’re bringing Google to market.

We’ve actually seen over the last year some initial success in landing a customer first on the public cloud. A lot of this is driven by the fact that these were VMware customers in the public cloud, and they’re looking for an option. A migration from VMware to Nutanix in the public cloud can be done fairly easily, very quickly. We’ve actually seen a handful of customers. I can’t call it a trend yet, but a good set of customers actually started their journey with Nutanix now in the public cloud. You can see that all this wide and see aperture of what we can go offer a customer in terms of meeting their needs and meeting their needs for applications and being able to run them in many different places.

Matt, Analyst, GS Communicopia and Technology Conference: You’re starting to see more lands with Nutanix NC2 as the anchor product. Is that on the back of some of these deals that you’ve struck with AWS around the migration?

Rajiv, Nutanix: That’s absolutely correct. Yes, in fact, that AWS expansion partnership is a very critical part of this.

Matt, Analyst, GS Communicopia and Technology Conference: Still ongoing.

Rajiv, Nutanix: Yes, ongoing, yes.

Matt, Analyst, GS Communicopia and Technology Conference: Yeah, Rukmini, for you, how early are we in the multi-product attach opportunity? You guys have a ton of new products to sell as a part of the broader platform. When do you expect this to be a more meaningful contributor to NRR beyond kind of the workload expansion opportunity?

Rukmini, Nutanix: Yeah, to be clear, it does contribute today. I think we can do more. It’s the, you’re right to ask the question. What we’ve done over the last, call it, 12 months or so is to hire more portfolio specialist sellers, those who are experts in areas like NDB or NKP, which is our Kubernetes platform, in order to assist our main core sellers to drive more of this portfolio attach. Our core sellers and the technical sellers who work with them certainly understand the platform really well and what customers are looking for, but they’re not as deep experts in these particular product areas. The idea is to create really a partnership between the two teams so they can drive more portfolio attach. We think we can do more really across the portfolio. We think NKP is showing some encouraging signs.

Like I said, fiscal year 2025 was a good year for NKP. Still small, to be clear. It’s a very small portion of the overall base. It should be growing nicely. As we think about 2026, those are some investments we’ve made. Now those portfolio sellers are ramping and should start to be productive here over time to help drive more, more expand with our customers.

Matt, Analyst, GS Communicopia and Technology Conference: I’m curious, Rajiv, for you, when you think about the NKP opportunity, is this more migrations of existing VMs onto containers, or is this really positioned as more of, hey, we’re going after net new apps because they’re all being developed through a containerized environment? Can you peel back that onion for us a little bit?

Rajiv, Nutanix: It’s a combination, but more oriented towards the latter, which is net new applications because there’s a ton of new applications being built. People, when they build new applications today, run them on Kubernetes, typically. Every AI application that we’re talking about is also going to be running on Kubernetes in some form or fashion. Therefore, a lot of this is in front of us as new applications are being built. At the same time that these new applications are being built, some portion of the existing application footprint will be refactored into containers. We don’t distinguish necessarily between those two. Our view is to provide customers with that flexibility, which is you can run your existing applications. At the same time, you’re going to have a mix of existing and new applications, and we can run both of them on the same platform.

You don’t have to choose a priori. Do I do this or that? You can mix and match.

Matt, Analyst, GS Communicopia and Technology Conference: Very helpful. Maybe we move on to the big topic of conversation, which is VMware. You guys have been quite vocal about the opportunity around the VMware disruption, but also, I think, very deliberate in messaging this as a gradual sort of multi-year opportunity. Maybe remind us why this is the case and how far along you think we are in this opportunity.

Rajiv, Nutanix: Yeah, I think it’s, we’ve always said that this is a large multi-year opportunity. Many analysts have pointed out that some subset of VMware customers will leave over a period of a few years. The numbers are very, Gartner and others have said 30%+ of customers will leave. Clearly, we’re seeing that. We’re seeing newer customers migrate. We’ve added 2,700+ customers over the last year. We’re seeing that increased base of customers, and almost all of them were using VMware before. The reason this takes time is because infrastructure is fairly sticky. To migrate infrastructure from one platform to the other, in many cases, first, there’s a timing of the VMware licenses, number one. Number two, for HCI at least, you have to replace, in many cases, existing hardware.

When a customer buys hardware, they typically depreciate it over a period of three to five years, so you have to time that refresh with the depreciation cycles. That’s the second aspect. Third is migration requires some work. Of course, we try to automate the actual process as much as we can, but it still requires the customer to have a focused project and migrate and put in some effort to go migrate everything and learn a new platform, whatever that may be. The fourth is just, I would just say, inertia. There’s a lot of inertia in this business. Customers have a lot of priorities. All of these, I think, contribute to the fact that migration is surely happening, but it happens at a gradual pace. To characterize where we are, I would say we are in our second innings of a baseball game.

Matt, Analyst, GS Communicopia and Technology Conference: Very, very early then. I think about the timing of renewals piece. Like in 2022, the deal was announced. In 2023, it was closed. You kind of look at 2025, 2026, like a lot of these customers are on three-year ELAs. I mean, how big is the kind of pool or addressable pool over the next 12 to 18 months when you think about this opportunity?

Rajiv, Nutanix: Yeah, I mean, look, I think this is, again, this gets changed out over time. By the way, some customers who renewed once have already renewed with Broadcom. In fact, what Broadcom said is the vast majority of their target customer base is now on VCF subscription. OK, the question is, again, as they come up for renewals, and some of them will come up for renewals now. Some of them renewed maybe last year. There’s a kind of a continuously coming out pool of revenue. I don’t think there’s like a peak event where everybody renews. It’s a gradual sort of renewal event. They have to plan for these migrations in advance. If there’s a renewal event, they have to give themselves time ahead of that to make sure they can plan and execute the migration.

Depending on the size of the environment, for small customers, like we had a law office, for example, migrate a couple of data centers, maybe tens of servers, and they were able to do that within a matter of a couple of weeks. For medium-sized enterprises, from anywhere from 25,000 cores to 100,000 cores, we’ve done many of these migrations in under a year. For the very large customers with millions of cores of compute, that might take two to three years to migrate. They have to plan, start planning, and start executing ahead of the migration time. Some of them start. Some of them have completed. Some of them haven’t started. In fact, many of them haven’t started. That still says that some of these guys are going to actually renew again for the second time. We might get in there as a second vendor.

We’ve seen that in many cases where they bring us in as a second vendor, and then we win a portion of their estate, and then we expand over time.

Matt, Analyst, GS Communicopia and Technology Conference: Right. Rukmini, from your side, what have you seen from kind of a pricing perspective out there as it pertains to VMware? Are you seeing Broadcom get more or less aggressive on the pricing side as you guys go after some of these larger enterprise deals?

Rukmini, Nutanix: I would say things have generally played out more or less as we had expected it to be because I think Broadcom’s playbook with their acquisitions is fairly well understood. What is different about VMware is they have a much larger customer base than perhaps some of their earlier acquisitions. To Rajiv’s point, it can be quite sticky. In general, they tend to acquire businesses that are sticky for good reason. As we know, they’ve made some changes to their pricing to make it more expensive going from just using a hypervisor to the full platform, which is what they’ve done. For us, we have always been comparable in terms of pricing in our full stack compared to theirs, just to be clear. We’re not here in the market to be some sort of discount offering. We add a lot of value to customers.

Our TCO, total cost of ownership savings, are meaningful to customers. We want to price in a way that is commensurate with the value that we’re adding to customers. That’s always been our approach and continues to be our approach. Of course, do we have a view around volume-based pricing? If there’s a customer, like Rajiv said, on the largest of the large, million plus cores, we’ll take that into account as we think about pricing and price it lower than someone who’s maybe a much smaller deployment. Naturally, we’d make adjustments like that. Our intention is to be competitive in the market because of the value we bring. We’ll also pick our spots where we want to go and win here.

I think they’ve also, Broadcom, for example, has also been quite clear, even publicly, about where they’re focused in terms of which accounts they care about, which are the largest ones and so on. We are focused, as Rajiv said, on making sure that our value proposition is more around we are a long-term partner. Our net promoter score has been 90 for over a decade. We are innovating in hybrid cloud. We’re innovating in Kubernetes. We’re innovating in AI. We are the partner you want for the long term. Pricing is one of the components versus sort of trying to win purely on price. It’s really all of the above.

Matt, Analyst, GS Communicopia and Technology Conference: Understood. I want to shift the conversation to margins. Nutanix has done a commendable job growing into its cost base with free cash margins now in the high 20s. Your guide suggests OpEx will run a bit hotter in 2026 versus the past couple of years. I guess, what are the primary investment initiatives for this year? How would you frame the drivers of leverage in the years ahead?

Rukmini, Nutanix: Right. So our margin, operating margin on non-GAAP basis for fiscal year 2026, the guide at the midpoint was a touch higher than what we did in 2025, which I believe is what you’re referring to. In terms of the investments that we’re driving, for us, the number one priority is driving growth because we see a large opportunity ahead of us. We want to make sure that everything we’re doing is in favor of getting that growth to be as high as it possibly can, also knowing that we have to drive leverage to the bottom line and drive improving operating margins. I will tell you that we’re not at our long-term operating margin. We know that we can do a lot better than where we are. In terms of investments that we’ve talked about, like I said earlier, portfolio specialists, for example, those are on the go-to-market side.

A few other investments on the go-to-market side I’ll call out. One is we’ve increased the number of reps that we have out there in the field because, again, large opportunity. It’s not a huge increase, but there has been an increase in our reps as we entered the new fiscal year. The people associated with those reps, they’ll have sales engineers. They might have other kind of supporting functions to help provide the support for that rep. Those are some of the areas in go-to-market. Another one I would highlight is around marketing, where we have had to dial up the volume on our presence in the market because we are smaller, as Rajiv said, from a lot of other companies in that Magic Quadrant.

We have invested in branding, marketing, getting awareness, higher awareness in the market about who we are and why we’re the right partner for companies. Those are some examples of investments on the go-to-market side, but also investing in R&D. Making our core platform, continuing to build on the core platform. We’re very proud of how far that core platform has come and how enterprise-ready it is. We’ll keep investing there. Other areas of investment on the R&D side are Kubernetes that we’ve talked about a lot here. On the AI side, external storage support has been another investment. We think these are all things that are directly linked to our growth drivers and where we can see a return. When we look at 2026, there is a bunch of OpEx that’s coming in.

That is run rate of people that we hired towards the second half of fiscal year 2025 that are all coming into 2026. We will be very prudent about where we choose to invest any incremental ones. To finish off the answer to your question, what are the overall drivers of leverage? We’re not at our long-term margins. The first one is our mix of renewals as a % of revenue or billings will continue to grow over time. As long as we can continue to transact those renewals more efficiently than we do land and expand, that should help drive leverage to the bottom line. We’ve demonstrated that over the last few years, and we expect that to continue. Another driver is productivity of our sales reps. When I say productivity, I mean specifically land and expand productivity, so incremental business that they’re bringing in.

We’ve seen a nice improvement in that over the last few years. We’re not yet at what we would characterize as industry benchmark levels of ACV productivity, so we intend to continue to drive that with our sellers. The third piece is what I’ll call good hygiene in terms of any incremental investment being really thought through. It has a real ROI. How can we leverage AI across some of the things we’re doing? More around just disciplined execution is the third bucket of things that we believe will continue to drive margin expansion over time.

Matt, Analyst, GS Communicopia and Technology Conference: Fantastic. With two minutes left, Rajiv, I want to close out with a question on AI. You’ve been in the market with Nutanix GPT-in-a-Box for over two years now. There’s a big debate around the ROI of use cases right now, especially around AI. Where are you seeing the most success today? How close do you think we are to sort of enterprise AI maturity to the extent that it can start benefiting Nutanix’s business?

Rajiv, Nutanix: Yeah, I think it’s still pretty early days for us. We’ve seen a good set of customers trying out the product, some of them who are getting to production with smaller applications. These applications tend to be largely around things that we’ve already seen out in the market, optimizing support, all kinds of document summarization initiatives, or call summarization, for example. If you have salespeople talking to clients and delivering insights and checking for compliance, fraud detection for money laundering, for example, or in retail stores, these are the kind of use cases that are emerging. I think we’ve seen, like I said, the first set of use cases. Customers are starting to take the simple ones into production. These are relatively small clusters, well-contained, with reasonable ROI. Support is the obvious one where they can get good ROI. On these things, the key driver that we’ve seen is data.

Where is the data located? Do they need to secure that data and run it in a private base securely? That’s where we see this. I still think we are in the very early stages of this. Over the next few years, we’re going to see much more of inference use cases starting to be deployed in volume, where people are still trying to figure out exactly the ROI that they can get as they optimize tasks or optimize entire workflows. I do think there’s a lot of optimization to be done. As those start coming into play, you’re going to see inferencing applications take off.

Matt, Analyst, GS Communicopia and Technology Conference: Excellent. With that, we are almost exactly at time. Thank you so much, Rajiv and Rukmini, for joining us today. Appreciate it. Looking forward to having you next year.

Rajiv, Nutanix: Thank you very much, Matt.

Rukmini, Nutanix: Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.