# Nutanix grows despite hardware price rises — retained record

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source: [news](https://highsignal.app/data/news) (news:blocksandfiles)  published 2026-08-27 14:30 ingested 2026-08-28 04:47

[original source ↗](https://www.blocksandfiles.com/hci/2026/08/27/nutanix-grows-despite-hardware-price-rises/5292962)

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HCI
Nutanix grows despite hardware price rises
Nutanix makes growth look so easy, but it’s finding trad HCI and VMware-migrating growth are slowing, and it’s pivoting to pursue agentic AI systems growth and neocloud customers, with layoffs to help it on its way.
Revenues in the quarter ended July 31 were $757.1 million, 16 percent more than a year ago, beating its high end $745 million outlook. Full fy2026 revenues were up12 percent Y/Y to $2.85 billion. GAAP net income for the quarter was $38.7 million, which compares badly to the year-ago’s $1.27 billion. But that was distorted by a $1.2 billion one-time non-cash income tax benefit that artificially spiked last year's net income. Full year net income of $188.37 million this year compares to last year’s $1.5 billion, affected by the same tax payment. Setting that aside makes fy2025 net income $327.1 million, implying this year’s number for Fy2026 is 42.4 percent down.
CEO Rajiv Ramaswami was measured in his comment on the quarter: “Our fourth quarter was a strong finish to fiscal 2026, a year in which we delivered solid top and bottom line performance and added over 3,000 new customers. In FY26, we made good progress with respect to partnerships, signing new or enhanced agreements with AMD, Lenovo, NetApp and Nvidia. We also delivered innovation across our cloud platform, especially with respect to AI and broadening our support for external storage.”
Financial summary
- Gross margin: 86.0 percent vs year-ago 87.2 percent
- Operating cash flow: $315.0 million vs year-ago $219.5 million
- Free cash flow: $277.6 million vs $207.8 million last year
- ARR: $2.55 billion vs year-ago $2.20 billion, up 16 percent
Nutanix said it beat all its guided metrics for the quarter, and added 650 new customers, taking its total count to 32,360.
Jason Ader, a William Blair analyst, said there was revenue growth: “strength driven by large-deal execution (average contract duration of 3.2 years slightly up year-over-year), strong bookings, and growing adoption of newer product offerings (including external storage, NC2, database management, etc.)”
Nutanix achieved a Rule of 40 score of 42 (revenue growth + free cash flow margin), marking the company’s third consecutive year above 40. Its 10-year average net promoter score is 90, which puts Everpure’s most recent 84 score in context.
Nutanix announced a 5 percent workforce reduction earlier this month, meaning around 400 jobs would go. This was, it said, “intended to streamline and realign the Company’s organizational structure, improve operational efficiency and agility, and reallocate resources toward strategic priorities and long-term growth objectives.” It “expects to substantially complete the workforce reduction by the end of October 2026.”
Ader commented: “Management views neoclouds as an incremental route to market for
enterprise AI deployments and expects ecosystem expansion to remain a key focus in fiscal 2027, with restructuring savings being reinvested in sales capacity, strategic partnerships, and broader adoption of its Agentic AI offerings.”
Nutanix is also porting its software to Arm processors as it wants to help lower its customers' hardware costs.
Next quarter’s revenue outlook is $760million +/- $5 million, a 13.3 percent mid-point rise, and lower growth than this quarter’s 16 percent. The outlook for all of fy2027 is $3.205 billion +/- $25 million, a 12.5 percent rise at the mid-point; an even lower growth rate.
Bootnote
Ader dived deeper into the outlook and commented: “While management remains constructive on underlying demand trends across the core business as newer growth vectors emerge, the fiscal 2027 guide embeds several factors of conservatism to account for various timing and deployment-related issues. These include:
- Continued server supply constraints, elevated lead times, and additional hardware price increases—all of which could impact the size and timing of customer projects and/or result in a higher mix of future-start-date deals;
- A fiscal 2027 renewals ACV cohort that is expected to grow at a slower rate year-over-year as the renewals base becomes larger over time;
- The impact of the recently announced 5 percent workforce reduction, with management expecting to reinvest the majority of associated savings in various go-to-market investments;
- A free cash flow headwind from approximately $38 million of restructuring charges at the midpoint ($32.5 million expected to be paid in cash during the first quarter of fiscal 2027 at the midpoint) and greater customer payment flexibility through annual payment structures and third-party financing (despite the vast majority of customers continuing to pay multiple years of cash upfront).
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