Nutanix (NTNX 2.34%), a company specializing in hybrid multicloud software platforms, released its results on August 27, 2025. The results highlighted GAAP revenue of $653.3 million, up from $548.0 million in Q4 FY2024, exceeding both its own guidance ($635 million–$645 million) and analyst consensus (about $643 million). Non-GAAP earnings per share reached $0.37, ahead of expectations. The company also reported a notable expansion in both GAAP and non-GAAP operating margin, and growth in its annual recurring revenue (ARR). Overall, the quarter demonstrated solid financial progress and outperformance against both internal and external expectations.
| Metric | Q4 FY2025 | Q4 FY2024 | Y/Y Change |
|---|---|---|---|
| EPS (Non-GAAP) | $0.37 | $0.23 | 60.9 % |
| Revenue | $653.3 million | $548.0 million | 19.3 % |
| Operating Margin (Non-GAAP) | 18.3 % | 12.9 % | 5.4 pp |
| Free Cash Flow | $207.8 million | $224.3 million | -7.4 % |
| Annual Recurring Revenue (ARR) | $2.22 billion | $1.91 billion | 16.4 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report.
Business Overview and Strategy
Nutanix builds software that enables companies to manage their information technology infrastructure across both on-premises data centers and public clouds. Its flagship product family includes virtualized platforms, cloud management software, and tools for running applications in hybrid environments.
In recent years, the company has focused on shifting from hardware sales to a subscription-driven software business model. The intent is to create steady, recurring revenue and provide customers with flexible solutions that support complex multicloud setups. Key success factors are continued innovation, expanding its range of software products, and forging partnerships with other infrastructure and cloud vendors.
Quarter Highlights: Financial and Operational Developments
The fourth quarter showed robust revenue growth, with the company bringing in $653.3 million, representing a 19% increase compared to the prior year period. This topped consensus expectations for revenue (GAAP). The primary driver was subscription revenue, which made up about 94.4% of total revenue. That subscription revenue figure increased 19% year over year, further reinforcing management’s ongoing push to prioritize predictable, renewable customer contracts over traditional hardware sales.
Annual recurring revenue (ARR), a measure that captures the value of subscription agreements on an annualized basis, rose 17% to $2.22 billion. This is a key indicator for a software company, as it demonstrates how much contracted revenue it expects to generate annually from its base of subscribers. Annual Recurring Revenue (ARR) is a non-GAAP key performance measure. The company also saw average contract durations expand from 3.1 to 3.2 years, suggesting customers are making longer-term commitments.
Operating profitability improved markedly. The non-GAAP operating margin reached 18.3 %, up from 12.9 % in the prior-year quarter. Non-GAAP earnings per share climbed to $0.37. At the same time, free cash flow (non-GAAP) fell to $207.8 million from $224.3 million in Q4 FY2024. Still, full-year free cash flow (non-GAAP) rose 25% year-over-year to $750.2 million.
Nutanix made significant progress on product expansion and innovation during the quarter. It launched the Nutanix Kubernetes Platform, a software suite designed for managing Kubernetes clusters -- tools that help companies automate the deployment and management of modern, containerized applications. The company also highlighted its growing set of tools for artificial intelligence (AI) workloads, referencing recent recognition by industry analysts like Forrester and Gartner for its container management products. While the Kubernetes and AI software offerings have not yet become substantial revenue contributors, their increasing prominence shows a strategic intent to diversify the product portfolio beyond the company’s historic strength in hyperconverged infrastructure (HCI) systems -- which combine compute, storage, and networking into a single solution.
Strategic partnerships emerged as a key theme for the quarter. The company announced new or expanded relationships with major technology providers, including Amazon Web Services (cloud services), Pure Storage (storage platforms), NVIDIA (AI hardware), and Google (cloud computing). A sizable multi-year contract was also signed with Finanz Informatik, a major IT provider in the European banking sector. These partnerships are central to Nutanix’s strategy of increasing its reach via channel partners and providing a platform for emerging technologies such as AI and cloud-native applications.
The company continued with its “land and expand” strategy to acquire new customers and deepen relationships with existing ones. Nutanix added over 2,700 new customers and saw contract terms extend. Net revenue retention -- which measures the tendency for existing customers to renew or grow their spending -- remained stable, holding at 110%.
Some metrics showed deceleration compared to the prior year. Free cash flow was down 7.4% year-over-year, and growth in ARR, while still solid, was somewhat slower than in past periods. These results reflect the impact of increased investments in research and development, sales, and some timing effects.
The company does not pay a dividend, but it expanded its share repurchase authorization by $350 million, reflecting continued use of share buybacks as a way to return capital to shareholders.
Looking Ahead: Guidance and Future Priorities
Management issued guidance for the upcoming fiscal year and first quarter. For Q1 FY2026, Nutanix expects revenue between $670 million and $680 million, implying about 18% revenue growth at the midpoint. The company forecasts non-GAAP operating margin in the 19.5% to 20.5% range. The full-year forecast calls for revenue of $2.90 billion to $2.94 billion and a non-GAAP operating margin of 21% to 22%. Management also projects free cash flow (non-GAAP) growth to slow, expecting $790 million to $830 million, or up about 5% to 11% from the prior year.
Investors may want to follow several issues in the months ahead. First, the company will change its ARR calculation method starting in Q1 FY2026, which could alter how growth is measured and reduce comparability with past results. Second, while Nutanix is building momentum in newer products like container management and AI software, these areas are still developing and are not yet significant contributors to revenue. Finally, as Nutanix pushes into new markets and increases partnership activities, its operating costs are expected to rise, raising questions about the sustainability of its margin expansion trend. NTNX does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
