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The following discussion and analysis of our financial condition, results of operations and cash flows should be read in conjunction with (1) the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (2) the audited consolidated financial statements and notes thereto and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the fiscal year ended July 31, 2025 filed on September 24, 2025. The last day of our fiscal year is July 31. Our fiscal quarters end on October 31, January 31, April 30 and July 31. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the heading "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2025 and in Part II, Item 1A of this Quarterly Report on Form 10-Q. See also "Special Note Regarding Forward-Looking Statements" above.
Overview
Nutanix, Inc. ("we," "us," "our," or "Nutanix") is a hybrid multicloud computing leader, offering organizations a unified software platform for running applications, deploying enterprise AI workloads and managing data anywhere. Our vision is to simplify the deployment and operation of the increasingly distributed landscape of apps and data while freeing organizations to focus on business goals. Our mission is to delight customers with an open, secure platform with rich data services that increases their ability to take advantage of new technologies such as cloud native and AI, optimizes how they run their organizations today, and accelerates innovation, efficiency, and growth.
The Nutanix Cloud Platform is designed to enable organizations to build hybrid multicloud infrastructure, providing a consistent cloud operating model with a single platform for running applications and enterprise AI workloads, and managing data in core data centers, at the edge, and in public clouds, while supporting customer choice across server platforms, storage options, public and managed clouds, and container and virtualization platforms. The Nutanix Cloud Platform supports a wide variety of workloads with varied compute, storage, and network requirements, including business-critical applications, data platforms (including SQL, NoSQL, and vector databases and business intelligence applications), enterprise AI workloads (including machine learning, generative AI, and agentic AI), general-purpose workloads (including system infrastructure, networking, and security), end-user computing and virtual desktop infrastructure services, and cloud native applications (including modern, containerized applications).
We originally pioneered hyperconverged infrastructure ("HCI") to break down legacy silos by merging compute, storage and networking into a single software-defined data center platform. We continued to innovate and developed Nutanix AHV, our native hypervisor that offers enterprise-grade virtualization and built-in Kubernetes support. To provide our customers with more choice, we further engineered our software solutions to run on a variety of server platforms and with a variety of external storage providers, decoupling our software from the underlying hardware and powering a variety of hybrid multi cloud deployments, as part of our previously-completed transition from a hardware company to a software company. Most recently, we have extended our software platform support to include external storage from qualified partners. To provide our customers with the flexibility to choose their preferred license levels and durations based on their specific business needs, we reshaped our licensing by completing a transition to a subscription-based business model. In addition to enabling enterprise AI and simplifying hybrid multicloud deployments, we have a further long-term vision to enable developers to build modern container-based applications once and run them anywhere through Project Beacon, our multi-year effort to provide consistent Kubernetes platform management and data-centric platform services across clouds.
Our business is organized into a single operating and reportable segment. We operate a subscription-based business model, meaning one in which our products, including associated support and maintenance arrangements, are sold with a defined duration.
Our platform typically includes one or more years of support and maintenance, which provides customers with the right to software upgrades and enhancements as well as technical support. Purchases of term-based licenses and software-as-a-service ("SaaS") subscriptions have support and maintenance included within the subscription fees and are not sold separately. Purchases of non-portable software are typically accompanied by the purchase of separate support and maintenance.
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
We had a broad and diverse base of over 31,000 end customers as of April 30, 2026. We define the number of end customers as the number of end customers for which we have received an order by the last day of the period, excluding partners to which we have sold products for their own demonstration purposes. A single organization or customer may represent multiple end customers for separate divisions, segments or subsidiaries, and the total number of end customers may contract due to mergers, acquisitions, or other consolidation among existing end customers.
Our solutions are primarily sold through our channel partners or original equipment manufacturers ("OEMs") and delivered directly to our end customers. We have end customers across a broad range of industries, such as automotive, consumer goods, education, energy, financial services, healthcare, manufacturing, media, public sector, retail, technology, and telecommunications. We also sell to service providers, who utilize our platform to provide a variety of cloud-based services to their customers.
We plan to continue investing in initiatives that support the long-term growth of our business, including the development of our solutions and sales and marketing efforts aimed at capitalizing on market opportunities. Simultaneously, we are focused on improving our operating cash flow through operational efficiencies, including in our go-to-market functions. By maintaining this balance, we believe we can sustain profitable growth.
Key Financial and Performance Metrics
We monitor the following key financial and performance metrics:
As of and for the
Three Months Ended April 30, Nine Months Ended April 30,
2025 2026 2025 2026
(in thousands, except percentages and end customer count)
Total revenue $ 638,983 $ 703,066 $ 1,884,660 $ 2,096,467
Year-over-year percentage increase 22 % 10 % 18 % 11 %
Annual recurring revenue ("ARR") (1) $ 2,119,028 $ 2,434,939 $ 2,119,028 $ 2,434,939
Gross profit $ 555,992 $ 610,787 $ 1,633,711 $ 1,825,445
Non-GAAP gross profit $ 563,562 $ 616,967 $ 1,658,984 $ 1,847,045
Gross margin 87.0 % 86.9 % 86.7 % 87.1 %
Non-GAAP gross margin 88.2 % 87.8 % 88.0 % 88.1 %
Operating expenses $ 507,347 $ 540,278 $ 1,492,378 $ 1,621,464
Non-GAAP operating expenses $ 426,495 $ 460,498 $ 1,242,407 $ 1,369,689
Operating income $ 48,645 $ 70,509 $ 141,333 $ 203,981
Non-GAAP operating income $ 137,067 $ 156,469 $ 416,577 $ 477,356
Operating margin 7.6 % 10.0 % 7.5 % 9.7 %
Non-GAAP operating margin 21.5 % 22.3 % 22.1 % 22.8 %
Net cash provided by operating activities $ 218,506 $ 207,504 $ 601,927 $ 601,675
Free cash flow $ 203,411 $ 197,181 $ 542,394 $ 563,105
Total end customers (2) 28,490 31,710 28,490 31,710
(1)Beginning with the first quarter of fiscal 2026, our methodology for calculating ARR was updated to align more closely with the timing of when licenses are made available to customers. For comparability purposes, ARR for all prior periods have been adjusted to conform to the updated methodology.
(2)The total end customer count reflects standard adjustments/consolidation to certain customer accounts within our system of record and is rounded to the nearest 10.
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Disaggregation of Revenue
The following table depicts the disaggregation of revenue by type, consistent with how we evaluate our financial performance:
Three Months Ended April 30, Nine Months Ended April 30,
2025 2026 2025 2026
(in thousands)
Disaggregation of revenue:
Subscription revenue $ 609,663 $ 664,792 $ 1,794,777 $ 1,993,163
Professional services and other revenue (1) 29,320 38,274 89,883 103,304
Total revenue $ 638,983 $ 703,066 $ 1,884,660 $ 2,096,467
(1)Prior to fiscal 2026, these amounts were presented as separate line items, Professional services and Other non-subscription product, as described below. Prior period amounts have been updated to conform to the current period presentation.
Subscription revenue — Subscription revenue includes any performance obligation which has a defined duration and is generated from the sales of software maintenance subscriptions, support subscriptions, subscription software licenses and cloud-based SaaS offerings.
•Ratable — We recognize revenue from software maintenance subscriptions, support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software maintenance subscriptions and support subscriptions. These offerings represented approximately $279.7 million and $840.3 million of our subscription revenue for the three and nine months ended April 30, 2025, respectively, and $322.6 million and $950.6 million of our subscription revenue for the three and nine months ended April 30, 2026, respectively.
•Upfront — We generally recognize revenue from our subscription software licenses upfront upon the transfer of control to the customer. For sales of our software purchased alongside a server from an OEM or other partner, revenue is typically recognized upon shipment of the server. For software sold separately from a server, revenue is typically recognized when the software is made available to the customer. These subscription software licenses represented approximately $330.0 million and $954.5 million of our subscription revenue for the three and nine months ended April 30, 2025, respectively, and $342.2 million and $1,042.6 million of our subscription revenue for the three and nine months ended April 30, 2026, respectively.
Professional services and other revenue — Includes Professional services revenue and Other non-subscription product revenue, as described below:
•Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed. Professional services revenue was approximately $28.0 million and $83.3 million for the three and nine months ended April 30, 2025, respectively, and $31.7 million and $91.0 million for the three and nine months ended April 30, 2026, respectively.
•Other non-subscription product revenue — Includes Non-portable software revenue and Hardware revenue, which were immaterial for the periods presented.
Non-GAAP Financial Measures and Key Performance Measures
In addition to GAAP metrics, we regularly monitor ARR, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, free cash flow, and total end customers, which are non-GAAP financial measures and key performance measures, to help us evaluate our growth and operational efficiencies, measure our performance, identify trends in our sales activity and establish our budgets. We evaluate these measures because they:
•are used by management and our Board of Directors to understand and evaluate our performance and trends, as well as to provide a useful measure for period-to-period comparisons of our core business, particularly as we operate a subscription-based business model;
•are widely used as a measure of financial performance to understand and evaluate companies in our industry; and
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
•are used by management to prepare and approve our annual budget and to develop short-term and long-term operational and compensation plans, as well as to assess our actual performance against our goals.
ARR is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the top-line growth of our subscription business (including our ability to acquire subscriptions with new customers and to retain and expand with existing customers), while normalizing for differences in contract durations. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, and non-GAAP operating margin are performance measures which we believe provide useful information to investors, as they provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures, such as stock-based compensation expense, that may not be indicative of our ongoing core business operating results. Free cash flow is a performance measure that we believe provides useful information to management and investors about the amount of cash generated by the business after capital expenditures. We use these non-GAAP financial and key performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons.
Non-GAAP financial measures have limitations as analytical tools and they should not be considered in isolation or as substitutes for analysis of our results as reported under generally accepted accounting principles ("GAAP") in the United States. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, and free cash flow are not substitutes for gross profit, gross margin, operating expenses, operating income, operating margin, or net cash provided by operating activities, respectively. There is no GAAP measure that is comparable to ARR, so we have not reconciled ARR numbers included in this Quarterly Report on Form 10-Q to any GAAP measure. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures and key performance measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures and key performance measures as tools for comparison. We urge you to review the reconciliation of our non-GAAP financial measures and key performance measures to the most directly comparable GAAP financial measures included below and not to rely on any single financial measure to evaluate our business.
We calculate our non-GAAP financial and key performance measures as follows:
ARR — We calculate ARR as the sum of annual contract value ("ACV") for all subscription contracts from all customers in effect as of the end of a specific period, assuming any subscription contract that expires is renewed on its existing terms. ARR excludes the value of professional services, non-portable software and support contracts and hardware sales. For the purposes of this calculation, we generally assume that the contract term begins on the date when the software is made available to the customer. ACV is defined as the total annualized value of a contract. The total annualized value for a contract is calculated by dividing the total value of the contract by the number of years in the term of such contract. Beginning with the first quarter of fiscal 2026, our methodology for calculating ARR was updated to align more closely with the timing of when licenses are made available to customers. Our calculation of ARR is not adjusted for the impact of any known or projected future events (such as customer cancellations, expansion or contraction of existing customers relationships or price increases or decreases) that may cause any subscription contract not to be renewed on its existing terms. ARR is a performance measure that should be viewed independently of revenue and does not represent our revenue under GAAP on an annualized basis or a forecast of GAAP revenue. Investors should not place undue reliance on ARR as an indicator of our future or expected results. ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled performance measures presented by other companies.
Non-GAAP gross profit and Non-GAAP gross margin — We calculate non-GAAP gross margin as non-GAAP gross profit divided by total revenue. We define non-GAAP gross profit as gross profit adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, and costs associated with certain other non-recurring transactions. Our presentation of non-GAAP gross profit and non-GAAP gross margin should not be construed as implying that our future results will not be affected by any recurring expenses or any unusual or non-recurring items that we exclude from our calculation of these non-GAAP financial measures.
Non-GAAP operating expenses — We define non-GAAP operating expenses as total operating expenses adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, litigation settlement accruals and legal fees related to certain non-ordinary course litigation matters, and costs associated with certain other non-recurring transactions. Our presentation of non-GAAP operating expenses should not be construed as implying that our future results will not be affected by any recurring expenses or any unusual or non-recurring items that we exclude from our calculation of this non-GAAP financial measure.
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Non-GAAP operating income and Non-GAAP operating margin — We calculate non-GAAP operating margin as non-GAAP operating income divided by total revenue. We define non-GAAP operating income as operating income adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, litigation settlement accruals and legal fees related to certain non-ordinary course litigation matters, and costs associated with certain other non-recurring transactions. Our presentation of non-GAAP operating income and non-GAAP operating margin should not be construed as implying that our future results will not be affected by any recurring expenses or any unusual or non-recurring items that we exclude from our calculation of these non-GAAP financial measures.
Free cash flow — We calculate free cash flow as net cash provided by operating activities less purchases of property and equipment, which measures our ability to generate cash from our business operations after our capital expenditures.
Total end customers — We define the number of end customers as the number of end customers for which we have received an order by the last day of the period, excluding partners to which we have sold products for their own demonstration purposes. A single organization or customer may represent multiple end customers for separate divisions, segments, or subsidiaries, and the total number of end customers may contract due to mergers, acquisitions, or other consolidation among existing end customers.
The following table presents a reconciliation of non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, and free cash flow to the most directly comparable GAAP financial measures, for each of the periods indicated:
Three Months Ended April 30, Nine Months Ended April 30,
2025 2026 2025 2026
(in thousands, except percentages)
Gross profit $ 555,992 $ 610,787 $ 1,633,711 $ 1,825,445
Stock-based compensation 7,024 6,074 23,193 21,282
Amortization of intangible assets 546 106 2,080 318
Non-GAAP gross profit $ 563,562 $ 616,967 $ 1,658,984 $ 1,847,045
Gross margin 87.0 % 86.9 % 86.7 % 87.1 %
Stock-based compensation 1.1 % 0.9 % 1.2 % 1.0 %
Amortization of intangible assets 0.1 % — 0.1 % —
Non-GAAP gross margin 88.2 % 87.8 % 88.0 % 88.1 %
Operating expenses $ 507,347 $ 540,278 $ 1,492,378 $ 1,621,464
Stock-based compensation (77,218 ) (76,744 ) (243,226 ) (241,860 )
Amortization of intangible assets (89 ) (88 ) (265 ) (264 )
Litigation settlement accrual and legal fees (3,545 ) (2,948 ) (6,480 ) (9,651 )
Non-GAAP operating expenses $ 426,495 $ 460,498 $ 1,242,407 $ 1,369,689
Operating income $ 48,645 $ 70,509 $ 141,333 $ 203,981
Stock-based compensation 84,242 82,818 266,419 263,142
Amortization of intangible assets 635 194 2,345 582
Litigation settlement accrual and legal fees 3,545 2,948 6,480 9,651
Non-GAAP operating income $ 137,067 $ 156,469 $ 416,577 $ 477,356
Operating margin 7.6 % 10.0 % 7.5 % 9.7 %
Stock-based compensation 13.2 % 11.9 % 14.2 % 12.6 %
Amortization of intangible assets 0.1 % — 0.1 % —
Litigation settlement accrual and legal fees 0.6 % 0.4 % 0.3 % 0.5 %
Non-GAAP operating margin 21.5 % 22.3 % 22.1 % 22.8 %
Net cash provided by operating activities $ 218,506 $ 207,504 $ 601,927 $ 601,675
Purchases of property and equipment (15,095 ) (10,323 ) (59,533 ) (38,570 )
Free cash flow (non-GAAP) $ 203,411 $ 197,181 $ 542,394 $ 563,105
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Factors Affecting Our Performance
We believe that our future success will depend on many factors, including those described below. While these areas present significant opportunity, they also present risks that we must manage to achieve successful results. See the section titled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2025 and the section titled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q for details. If we are unable to address these challenges, our business and operating results could be materially and adversely affected.
Investment in Profitable Growth
We plan to continue investing in initiatives that support our long-term growth, while also focusing on improving our operating cash flow through operational efficiencies, including in our go-to-market functions. By maintaining this balance, we believe we can sustain profitable growth.
Investment in Sales and Marketing – Our ability to drive top-line growth depends, in large part, on our ability to capitalize on our market opportunity, including our ability to recruit, train and retain sufficient numbers of ramped sales personnel. We plan to continue investing in sales and marketing functions, including initiatives focused on opportunities with major accounts, large deals, and commercial accounts, as well as other initiatives to increase our pipeline growth. As we continue to recruit additional sales representatives, it will take time to train and ramp them to full productivity. As a result, we expect that our overall sales and marketing expense will increase in the near term. We estimate, based on past experience, that our average sales team members typically become fully ramped up around the start of their fourth quarter of employment with us, and as our newer employees ramp up, we expect their increased productivity to contribute to our revenue growth. As we continue to focus some of our newer and existing sales team members on major accounts and large deals, and as we operate our subscription-based business model, it may take longer, potentially significantly, for these sales team members to become fully productive, and there may also be an impact to the overall productivity of our sales team. As part of our overall efforts to improve our operating margin performance, we have also proactively taken steps to increase our go-to-market productivity and over time, we intend to reduce our overall sales and marketing spend as a percentage of revenue. These measures include addressing a growing mix of renewals, which have a lower cost than landing new customers or expanding into our existing customer base, improving the efficiency of our demand generation spend, increasing leverage of our channel partners and OEMs, including supporting new OEMs, and optimizing headcount in geographies based on market opportunities.
Investment in Research and Development – We plan to continue investing in our global research and development teams to support enhancements to our solutions, improve integration with ecosystem partners and expand the range of technologies and features available through our platform. These investments are intended to strengthen our core offerings and enable us to respond to evolving technology trends, including developments in generative AI and modern applications across hybrid and multicloud environments.
We believe that these investments will support our long-term growth strategy, although they may result in increased expenses and adversely affect our profitability in the near term.
Our Subscription-Based Business Model
We operate a subscription-based business model to provide our customers with the flexibility to choose their preferred license levels and durations based on their specific business needs. A subscription-based business model means one in which our products, including associated support and maintenance arrangements, are sold with a defined duration. Subscription-based sales consist of subscription term-based licenses and offerings with ongoing performance obligations, including software maintenance subscriptions, support subscriptions and cloud-based SaaS offerings. Revenue from subscription term-based licenses is generally recognized upfront upon transfer of control to the customer, which occurs when we make the software available to the customer. Accordingly, any reduction in the total average contract duration of our subscription term-based licenses would decrease the amount of license revenue recognized upfront and could adversely affect our revenue for the applicable period. Revenue from software maintenance subscriptions, support subscriptions and cloud-based SaaS offerings is recognized ratably over the contractual service period. Accordingly, any decline in such subscriptions, whether new subscriptions or renewals, in any given fiscal quarter may not be fully or immediately reflected in our revenue for that quarter. For additional information on revenue recognition, see Note 2 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Market Adoption of Our Products
Hybrid and multicloud architectures, as well as trends in enterprise AI and modern containerized applications, have affected IT buyer expectations around the simplicity, agility, scalability, portability, and pay-as-you-grow economics of IT resources. A key focus of our sales and marketing efforts is creating market awareness of the benefits of our platform. This includes our newer solutions that extend beyond our core hyperconverged infrastructure offering, both as compared to traditional data center architectures, as well as the public cloud, particularly as we continue to pursue large enterprises and mission critical workloads. Our business and operating results will be significantly affected by the degree to and speed with which organizations adopt our platform.
Leveraging Partners
We plan to continue to leverage our relationships with our channel and OEM partners and expand our network of cloud and ecosystem partners, all of which help to drive the adoption and sale of our solutions with our end customers. We sell our solutions primarily through our partners, and our solutions primarily run on hardware platforms that our customers often choose to purchase from our channel or OEM partners. We believe that increasing channel leverage, particularly as we expand our focus on opportunities in commercial accounts, by investing in sales enablement and co-marketing with our channel and OEM partners over the long term will extend and improve our engagement with a broad set of end customers. Our reliance on manufacturers to produce the hardware platforms on which our software typically runs exposes us to supply chain delays, which could impair our ability to deliver solutions to end customers in a timely manner, particularly to the extent that current supply and pricing dynamics continue. Beginning in the latter half of the second quarter of fiscal 2026, constraints affecting the availability of certain hardware components at manufacturers became increasingly acute. These constraints have resulted in higher hardware pricing in the market and extended hardware lead times, which vary across hardware vendors. Higher hardware pricing, together with extended hardware lead times, have impacted, and may continue to impact, customers' ability to deploy and consume our software, which affects the timing of revenue recognition and cash flows from period to period and, in certain instances, may result in some customers delaying projects or otherwise seeking greater flexibility with licensing. Our software platform provides customers with flexibility and choice across deployment options, including hardware vendors, public cloud environments, and a growing set of external storage options, which can help enable customers to better manage how and when they deploy our solutions in periods of supply and pricing volatility. While a majority of our customer transactions involve a software‑only fulfillment motion, in a subset of transactions, customers previously purchased our software in connection with Nutanix‑branded NX‑series hardware platforms. To provide customers in these transactions with greater flexibility when facing extended hardware lead times, beginning in the third quarter of fiscal 2026, we enabled these customers to purchase our software independently of hardware delivery, thereby aligning software provisioning for these transactions with our existing software‑only fulfillment motion. This may impact the timing of revenue recognition and our ARR. Our business and results of operations will be significantly affected by our success in leveraging our relationships with our channel and OEM partners and expanding our network of cloud and ecosystem partners.
Customer Acquisition, Retention and Expansion
Our business and operating results will depend on our ability to obtain new end customers and retain and sell additional solutions to our existing base of end customers. Our ability to obtain new end customers and retain and sell additional solutions to existing customers will in turn depend in part on a number of factors. These factors include our ability to: execute on our business plans, vision, and objectives (including our growth and go-to-market strategies), respond to competitive pressures, effectively maintain existing and future customer relationships, continue to innovate by adding new functionality and improving usability of our solutions in a manner that addresses our end customers’ needs and requirements, and optimally price our solutions in light of marketplace conditions, our ability to respond to competitive pressures, manage our costs, and anticipate and manage customer demand. Furthermore, our subscription-based business model and product transitions may cause concerns among our customer base, including concerns regarding changes to pricing over time, and may also result in confusion among new and existing end customers, for example, regarding our pricing models. Such concerns and/or confusion can slow adoption and renewal rates among our current and future customer base.
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Our end customers typically deploy our technology for a specific workload initially. After a new end customer's initial order, which includes the product and associated software maintenance subscriptions, support subscription and services, we focus on expanding our footprint by serving more workloads. We also generate recurring revenue from renewals, and given our subscription-focused business model, these renewals are having an increasing significance for our future revenue streams as existing subscriptions come up for renewal. We view continued purchases and upgrades as critical drivers of our success. As of April 30, 2026, our net dollar-based retention rate ("NRR") was 106%, compared to 110% as of April 30, 2025. NRR is calculated as of the end of a twelve-month period. We calculate NRR by starting with the ARR for all customers with subscription contracts at the beginning of the period. We then divide end-of-the-period ARR for the same customer group by the beginning-of-the-period ARR. NRR is a performance measure that we believe provides useful information to our management and investors as it provides an indication of our ability to retain and expand ARR from our existing customer base.
Over time, our sales pipeline has evolved to include a higher mix of larger deal opportunities, which often take longer to close and require more levels of review from the customer's executive team, involve greater competition, and have greater variability in timing, outcome and deal structure. These trends drive greater variability in our ability to land new customers and expand sales to existing customers, and our top-line results may be adversely affected.
Macroeconomic Conditions
Our overall performance depends in part on worldwide economic and geopolitical conditions and their impact on customer and partner behavior. Macroeconomic conditions, including inflation, fluctuations in interest rates, foreign currency fluctuations, tariffs or other trade restrictions, geopolitical issues, changes in government policy or spending, and other changes in economic conditions, may adversely affect the buying patterns of our customers and prospective customers, including the length of sales cycles, our overall pipeline and pipeline conversion, and our top-line growth expectations. Due to our subscription-focused business model, any impact of the current macroeconomic environment on our business, particularly as a result of changes in our customer and partner behavior, may not be fully reflected in our results of operations until future periods, if at all. As we continue to monitor the direct and indirect impacts of the current environment, the broader implications of macroeconomic conditions on our business, results of operations and financial condition, particularly in the long term, remain uncertain.
Components of Our Results of Operations
Revenue
We generate revenue primarily from the sale of the Nutanix Cloud Platform, sold primarily as subscription term-based licenses, and which can be deployed on a variety of qualified hardware platforms or, in the case of our cloud-based SaaS offerings, via hosted service or delivered pre-installed on a server that is configured to order. Non-portable software licenses are delivered or sold alongside configured-to-order servers and can be used over the life of the associated server.
Our subscription term-based licenses are sold separately, or can be sold alongside configured-to-order servers. Our subscription term-based licenses typically have a term of one to five years. Our cloud-based SaaS subscriptions have terms extending up to five years.
Our customers generally purchase their qualified hardware platforms for deployment of our software from one of our channel partners or OEMs. Our platform typically includes one or more years of support and maintenance, which provides customers with the right to software upgrades and enhancements as well as technical support. Our platform is primarily sold through channel partners and OEMs. Revenue is recognized net of sales tax and withholding tax.
Product revenue — Product revenue primarily consists of software revenue. A majority of our product revenue is generated from the sale of the Nutanix Cloud Platform. We also sell renewals of previously purchased software licenses and SaaS offerings. We recognize revenue from our software products upon the transfer of control to the customer. For sales of our software purchased alongside a server from an OEM or other partner, revenue is typically recognized upon shipment of the server. For software sold separately from a server, revenue is typically recognized when the software is made available to the customer. For our SaaS offerings, revenue is typically recognized as the services are performed. In the infrequent transactions where the hardware is purchased directly from Nutanix, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis.
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Support, maintenance and other services revenue — We generate our support, maintenance and other services revenue primarily from software maintenance subscriptions and support subscriptions, which include the right to software upgrades and enhancements as well as technical support. The majority of our product sales are sold in conjunction with software maintenance subscriptions and support subscriptions, with terms ranging from one to five years. Occasionally, we also sell professional services with our products. We recognize revenue from software maintenance subscriptions and support contracts ratably over the contractual service period, which typically commences upon transfer of control of the corresponding products to the customer. We recognize revenue related to professional services as they are performed.
Cost of Revenue
Cost of product revenue — Cost of product revenue consists of costs paid to OEM partners, hardware costs, personnel costs associated with our operations function, consisting of salaries, benefits, bonuses, and stock-based compensation, cloud-based costs associated with our SaaS offerings, and allocated costs. Allocated costs consist of certain facilities, depreciation and amortization, recruiting, and information technology costs that are allocated based on headcount.
Cost of support, maintenance and other services revenue — Cost of support, maintenance and other services revenue includes personnel and operating costs associated with our global customer support and services organization, as well as allocated costs. We expect our cost of support, maintenance and other services revenue to increase in absolute dollars as our support, maintenance and other services revenue increases.
Operating Expenses
Our operating expenses consist of sales and marketing, research and development and general and administrative expenses. The largest component of our operating expenses is personnel costs. Personnel costs consist of wages, benefits, bonuses and, with respect to sales and marketing expenses, sales commissions.
Sales and marketing — Sales and marketing expense consists primarily of personnel costs, including sales commissions. Sales and marketing expense also includes costs for promotional activities and other marketing costs, travel expenses, costs associated with demonstration units, including depreciation, and allocated costs. Commissions are deferred and recognized as we recognize the associated revenue. We expect sales and marketing expense to continue, in the long term, to increase in absolute dollars as part of our long-term plans to invest in our growth. However, as part of our overall efforts to improve our operating cash flow performance, we have also proactively taken steps to increase our go-to-market productivity and over time, we intend to reduce our overall sales and marketing spend as a percentage of revenue. As we continue to recruit additional sales representatives, it will take time to train and ramp them to full productivity. As a result, our sales and marketing expense may fluctuate.
Research and development — Research and development ("R&D") expense consists primarily of personnel costs, as well as other direct and allocated costs. We have devoted our product development efforts primarily to enhancing the functionality and expanding the capabilities of our solutions. R&D costs are expensed as incurred, unless they meet the criteria for capitalization. We expect R&D expense, in the long term, to increase in absolute dollars as part of our long-term plans to invest in our future products and services, including our newer subscription-based products, although R&D expense may fluctuate as a percentage of total revenue and, on an absolute basis, from quarter to quarter.
General and administrative — General and administrative ("G&A") expense consists primarily of personnel costs, which include our executive, finance, human resources, and legal organizations. G&A expense also includes outside professional services, which consists primarily of legal, accounting and other consulting costs, as well as insurance and other costs associated with being a public company and allocated costs. We expect G&A expense, in the long term, to increase in absolute dollars, particularly due to additional legal, accounting, insurance, and other costs associated with our growth, although G&A expense may fluctuate as a percentage of total revenue and, on an absolute basis, from quarter to quarter.
Other Income (Expense), Net
Other income (expense), net consists primarily of interest income and expense, which includes the amortization of the debt discount and debt issuance costs associated with our outstanding 0.25% convertible senior notes due 2027 (the "2027 Notes") and our outstanding 0.50% convertible senior notes due 2029 (the "2029 Notes"), interest expense on the 2027 Notes and 2029 Notes, inducement expense related to the partial repurchase of the 2027 Notes, interest income related to our short-term investments, and foreign currency exchange gains or losses.
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NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Provision for Income Taxes
Provision for income taxes consists primarily of income taxes for certain foreign jurisdictions in which we conduct business and federal and state income taxes in the United States. We continue to maintain a full valuation allowance against our U.S. federal and state deferred tax assets as of April 30, 2026. We will continue to maintain a full valuation allowance on our U.S. net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of this allowance. However, given our recent history of profitable operating results and current and anticipated future earnings, we believe that if current trends persist, there is a reasonable possibility that over the next several quarters, sufficient positive evidence may become available to allow us to reach the conclusion that a significant portion of the valuation allowance will no longer be needed. The release of all, or a portion of, the valuation allowance would result in the recognition of certain deferred tax assets and a decrease in income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to significant judgment and our analysis of positive and negative factors.
The One Big Beautiful Bill Act ("OBBBA"), signed into law on July 4, 2025, has officially repealed the amortization requirement under IRC Section 174, restoring immediate expensing for domestic research and experimental ("R&E") expenditures. Effective for taxable years beginning after December 31, 2024, taxpayers may deduct domestic R&E expenditures immediately and for the R&E expenditures capitalized from 2022 to 2024, OBBBA also allows taxpayers to make an election to accelerate the deductions over one year or two years. We have assessed the impact of OBBBA on our fiscal 2026 provision for income taxes and determined that there is no material impact to our financial statements for fiscal 2026.
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NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Results of Operations
The following tables set forth our condensed consolidated results of operations in dollars and as a percentage of total revenue for the periods presented. The period-to-period comparison of results is not necessarily indicative of results for future periods.
Three Months Ended April 30, Nine Months Ended April 30,
2025 2026 2025 2026
(in thousands)
Revenue:
Product $ 345,479 $ 364,938 $ 1,001,585 $ 1,101,305
Support, maintenance and other services 293,504 338,128 883,075 995,162
Total revenue 638,983 703,066 1,884,660 2,096,467
Cost of revenue:
Product (1)(2) 6,776 5,816 23,969 15,782
Support, maintenance and other services (1) 76,215 86,463 226,980 255,240
Total cost of revenue 82,991 92,279 250,949 271,022
Gross profit 555,992 610,787 1,633,711 1,825,445
Operating expenses:
Sales and marketing (1)(2) 260,402 283,605 775,185 846,381
Research and development (1) 186,413 196,098 543,157 585,839
General and administrative (1) 60,532 60,575 174,036 189,244
Total operating expenses 507,347 540,278 1,492,378 1,621,464
Income from operations 48,645 70,509 141,333 203,981
Other income, net 15,954 10,805 25,172 40,412
Income before provision for income taxes 64,599 81,314 166,505 244,393
Provision for income taxes 1,236 9,227 16,789 7,188
Net income $ 63,363 $ 72,087 $ 149,716 $ 237,205
(1) Includes stock-based compensation expense as follows:
Product cost of revenue $ 401 $ 364 $ 2,425 $ 1,150
Support, maintenance and other services cost of revenue 6,623 5,710 20,768 20,132
Sales and marketing 19,513 19,556 61,558 60,070
Research and development 42,162 44,757 132,489 135,363
General and administrative 15,543 12,431 49,179 46,427
Total stock-based compensation expense $ 84,242 $ 82,818 $ 266,419 $ 263,142
(2) Includes amortization of intangible assets as follows:
Product cost of revenue $ 546 $ 106 $ 2,080 $ 318
Sales and marketing 89 88 265 264
Total amortization of intangible assets $ 635 $ 194 $ 2,345 $ 582
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NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Three Months Ended April 30, Nine Months Ended April 30,
2025 2026 2025 2026
(as a percentage of total revenue)
Revenue:
Product 54.1 % 51.9 % 53.1 % 52.5 %
Support, maintenance and other services 45.9 % 48.1 % 46.9 % 47.5 %
Total revenue 100.0 % 100.0 % 100.0 % 100.0 %
Cost of revenue:
Product 1.1 % 0.8 % 1.3 % 0.8 %
Support, maintenance and other services 11.9 % 12.3 % 12.0 % 12.1 %
Total cost of revenue 13.0 % 13.1 % 13.3 % 12.9 %
Gross profit 87.0 % 86.9 % 86.7 % 87.1 %
Operating expenses:
Sales and marketing 40.8 % 40.3 % 41.1 % 40.4 %
Research and development 29.2 % 27.9 % 28.8 % 27.9 %
General and administrative 9.5 % 8.6 % 9.2 % 9.0 %
Total operating expenses 79.5 % 76.8 % 79.1 % 77.3 %
Income from operations 7.5 % 10.1 % 7.6 % 9.8 %
Other income, net 2.5 % 1.5 % 1.3 % 1.9 %
Income before provision for income taxes 10.0 % 11.6 % 8.9 % 11.7 %
Provision for income taxes 0.2 % 1.3 % 0.9 % 0.3 %
Net income 9.8 % 10.3 % 8.0 % 11.4 %
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NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Comparison of the Three and Nine Months Ended April 30, 2025 and 2026
Revenue
Three Months Ended April 30, Change Nine Months Ended April 30, Change
2025 2026 $ % 2025 2026 $ %
(in thousands, except percentages)
Product $ 345,479 $ 364,938 $ 19,459 6 % $ 1,001,585 $ 1,101,305 $ 99,720 10 %
Support, maintenance and other services 293,504 338,128 44,624 15 % 883,075 995,162 112,087 13 %
Total revenue $ 638,983 $ 703,066 $ 64,083 10 % $ 1,884,660 $ 2,096,467 $ 211,807 11 %
Three Months Ended April 30, Change Nine Months Ended April 30, Change
2025 2026 $ % 2025 2026 $ %
(in thousands, except percentages)
U.S. $ 346,102 $ 377,046 $ 30,944 9 % $ 1,046,105 $ 1,128,064 $ 81,959 8 %
Europe, the Middle East and Africa 172,415 201,115 28,700 17 % 504,954 607,602 102,648 20 %
Asia Pacific 106,902 103,278 (3,624 ) (3 )% 294,926 302,336 7,410 3 %
Other Americas 13,564 21,627 8,063 59 % 38,675 58,465 19,790 51 %
Total revenue $ 638,983 $ 703,066 $ 64,083 10 % $ 1,884,660 $ 2,096,467 $ 211,807 11 %
Product revenue increased by approximately $19.5 million, or 6%, and $99.7 million, or 10%, for the three and nine months ended April 30, 2026, respectively, as compared to the respective prior year periods, due primarily to increases in software revenue as a result of increased adoption of our products, driven by growth in software renewals and the various programs we have put in place to attract new customers onto our platform and expand with existing customers.
Support, maintenance and other services revenue increased by approximately $44.6 million, or 15%, and $112.1 million, or 13%, for the three and nine months ended April 30, 2026, respectively, as compared to the respective prior year periods, in conjunction with the growth of our end customer base, which grew approximately 11% from April 30, 2025 to April 30, 2026, and the related software maintenance and support subscription contracts and renewals.
For both the three and nine months ended April 30, 2025, the total average contract duration was approximately 3.1 years. For the three and nine months ended April 30, 2026, the total average contract duration was approximately 3.4 years and 3.2 years, respectively. Total average contract duration represents the dollar-weighted term across all subscription contracts, as well as our limited number of life-of-device contracts billed during the period, using an assumed term of five years for licenses without a specified term, such as life-of-device licenses.
Cost of Revenue and Gross Margin
Three Months Ended April 30, Change Nine Months Ended April 30, Change
2025 2026 $ % 2025 2026 $ %
(in thousands, except percentages)
Cost of product revenue $ 6,776 $ 5,816 $ (960 ) (14 )% $ 23,969 $ 15,782 $ (8,187 ) (34 )%
Product gross margin 98.0 % 98.4 % 97.6 % 98.6 %
Cost of support, maintenance and other services revenue $ 76,215 $ 86,463 $ 10,248 13 % $ 226,980 $ 255,240 $ 28,260 12 %
Support, maintenance and other services gross margin 74.0 % 74.4 % 74.3 % 74.4 %
Total gross margin 87.0 % 86.9 % 86.7 % 87.1 %
Cost of product revenue
Cost of product revenue decreased for the three and nine months ended April 30, 2026, as compared to the respective prior year periods, due primarily to decreases in overhead resulting from lower operating lease and finance lease costs.
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Product gross margin increased by approximately 0.4 percentage points and 1.0 percentage points for the three and nine months ended April 30, 2026, respectively, as compared to the respective prior year periods, due primarily to product revenue increasing while cost of product revenue decreased.
Cost of support, maintenance and other services revenue
Cost of support, maintenance and other services revenue increased for the three and nine months ended April 30, 2026, as compared to the respective prior year periods, due primarily to higher personnel-related costs, resulting from growth in our global customer support organization.
Support, maintenance and other services gross margin increased by approximately 0.4 percentage points and 0.1 percentage points for the three and nine months ended April 30, 2026, respectively, as compared to the respective prior year periods, due primarily to support, maintenance and other services revenue growing at a faster rate than personnel-related costs.
Operating Expenses
Sales and marketing
Three Months Ended April 30, Change Nine Months Ended April 30, Change
2025 2026 $ % 2025 2026 $ %
(in thousands, except percentages)
Sales and marketing $ 260,402 $ 283,605 $ 23,203 9 % $ 775,185 $ 846,381 $ 71,196 9 %
Percent of total revenue 40.8 % 40.3 % 41.1 % 40.4 %
Sales and marketing expense increased for the three and nine months ended April 30, 2026, as compared to the respective prior year periods, due primarily to higher personnel-related costs resulting from the 7% growth in our sales and marketing headcount from April 30, 2025 to April 30, 2026, as well as increased marketing spending on events.
Research and development
Three Months Ended April 30, Change Nine Months Ended April 30, Change
2025 2026 $ % 2025 2026 $ %
(in thousands, except percentages)
Research and development $ 186,413 $ 196,098 $ 9,685 5 % $ 543,157 $ 585,839 $ 42,682 8 %
Percent of total revenue 29.2 % 27.9 % 28.8 % 27.9 %
Research and development expense increased for the three and nine months ended April 30, 2026, as compared to the respective prior year periods, due primarily to higher personnel-related costs resulting from the 8% growth in our R&D headcount from April 30, 2025 to April 30, 2026, as well as an increase in IT and facilities costs, partially offset by an increase in reimbursements for technical costs related to certain partner programs.
General and administrative
Three Months Ended April 30, Change Nine Months Ended April 30, Change
2025 2026 $ % 2025 2026 $ %
(in thousands, except percentages)
General and administrative $ 60,532 $ 60,575 $ 43 0 % $ 174,036 $ 189,244 $ 15,208 9 %
Percent of total revenue 9.5 % 8.6 % 9.2 % 9.0 %
General and administrative expense increased for the three and nine months ended April 30, 2026, as compared to the respective prior year periods, due primarily to higher personnel-related costs resulting from the 10% growth in our G&A headcount from April 30, 2025 to April 30, 2026 and higher legal and outside services costs.
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NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Other Income (Expense), Net
Three Months Ended April 30, Change Nine Months Ended April 30, Change
2025 2026 $ % 2025 2026 $ %
(in thousands, except percentages)
Interest income, net $ 17,988 $ 17,505 $ (483 ) (3 )% $ 43,022 $ 55,255 $ 12,233 28 %
Amortization of debt discount and issuance costs and interest expense (2,950 ) (2,996 ) (46 ) (2 )% (5,370 ) (8,984 ) (3,614 ) (67 )%
Inducement expense — — — 0 % (11,347 ) — 11,347 100 %
Other 916 (3,704 ) (4,620 ) (504 )% (1,133 ) (5,859 ) (4,726 ) (417 )%
Other income (expense), net $ 15,954 $ 10,805 $ (5,149 ) (32 )% $ 25,172 $ 40,412 $ 15,240 61 %
Other income (expense), net decreased for the three months ended April 30, 2026, as compared to the respective prior year period, due primarily to an increase in foreign exchange expense.
Other income (expense), net increased for the nine months ended April 30, 2026, as compared to the respective prior year period, due primarily to an increase in interest income from our short-term investments which increased from approximately $1,009.9 million as of April 30, 2025 to $1,299.1 million as of April 30, 2026, as well as approximately $11.3 million of inducement expense recognized during the second quarter of fiscal 2025 related to the partial repurchase of the 2027 Notes. The increase in other income (expense), net was partially offset by an increase in foreign exchange expense as well as an increase in interest expense related to our convertible notes, as the 2029 Notes were issued during the second quarter of fiscal 2025.
Provision for Income Taxes
Three Months Ended April 30, Change Nine Months Ended April 30, Change
2025 2026 $ % 2025 2026 $ %
(in thousands, except percentages)
Provision for income taxes $ 1,236 $ 9,227 $ 7,991 647 % $ 16,789 $ 7,188 $ (9,601 ) (57 )%
The increase in the income tax provision for the three months ended April 30, 2026, as compared to the respective prior year period, was due primarily to the release of certain uncertain tax positions as a result of the expiration of the statute of limitations during the fiscal quarter ended April 30, 2025. The decrease in the income tax provision for the nine months ended April 30, 2026, as compared to the respective prior year period, was due primarily to the tax benefit recognized for the release of certain uncertain tax positions as a result of the expiration of the statute of limitations during the nine months ended April 30, 2026.
Liquidity and Capital Resources
Our principal sources of liquidity are cash, cash equivalents and marketable securities and net accounts receivable. As of April 30, 2026, we had approximately $718.8 million of cash and cash equivalents and $1,299.1 million of short-term investments, which were held for general corporate purposes. Our restricted cash balance was not material. Our cash, cash equivalents and short-term investments primarily consist of bank deposits, money market accounts and highly rated debt instruments of the U.S. government and its agencies and debt instruments of highly rated corporations. As of April 30, 2026, we had accounts receivable of approximately $251.6 million, net of allowances of $3.0 million.
In September 2021, we issued convertible senior notes with a 0.25% interest rate for an aggregate principal amount of $575.0 million due 2027, of which $477.3 million in principal amount was issued in exchange for approximately $416.5 million principal amount of the 2023 Notes and the remaining $97.7 million in principal amount was issued for cash. There are no required principal payments on the 2027 Notes prior to their maturity.
In December 2024, we issued convertible senior notes with a 0.50% interest rate for an aggregate principal amount of $862.5 million due 2029. We used approximately $95.5 million of the net proceeds from the offering to repurchase $75.0 million aggregate principal amount of the outstanding 2027 Notes. There are no required principal payments on the 2029 Notes prior to their maturity.
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NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
In February 2025, we entered into a revolving credit agreement (the "Revolver") that provides for a senior secured revolving credit facility in an aggregate principal amount of $500.0 million, including a $25.0 million sublimit for the issuance of letters of credit. The Revolver matures in February 2030, subject to earlier springing maturity under certain circumstances. As of April 30, 2026, we had no borrowings and an immaterial amount of letters of credit outstanding under the Revolver. The Revolver contains customary affirmative and negative covenants (including a financial covenant and restrictions on liens, investments, indebtedness, fundamental changes, restricted payments, transactions with affiliates, prepayments of subordinated debt and other matters, all subject to certain exceptions). The financial covenant requires us to maintain a total leverage ratio of less than or equal to 3.75:1.00, tested at the end of each fiscal quarter. As of April 30, 2026, we were in compliance with the financial covenant.
For additional information regarding our debt offerings, see Note 5 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
In May 2026, we completed the issuance and sale of 4,136,789 shares of our Class A common stock to Advanced Micro Devices, Inc. at a purchase price of $36.26 per share, for aggregate cash proceeds of approximately $150.0 million.
We believe that our cash, cash equivalents and short-term investments, available borrowing capacity under the Revolver, and our expected net cash provided by operating activities will be sufficient to meet our anticipated cash needs, including for working capital, capital expenditures, share repurchases (if any), the payment of taxes related to the net share settlement of equity awards, and interest and other obligations related to convertible notes, for at least the next 12 months. Our future cash needs will depend on many factors, including our growth strategy and plans, the timing and extent of spending to support research and development and engineering efforts; the expansion of sales and marketing activities; the introduction of new and enhanced product and service offerings; the continuing market acceptance of our products; our end customers and partners; any acquisitions of businesses, technologies or products; any share repurchases; and market, economic and financial conditions (including inflation and interest rates). Holders of the 2027 Notes or the 2029 Notes will be entitled to convert their 2027 Notes or 2029 Notes under certain circumstances as described in Note 5 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. If one or more holders elect to convert their 2027 Notes or 2029 Notes, as applicable, we may elect to satisfy our conversion obligation by delivering shares of our Class A common stock or a combination of cash and shares of Class A common stock, rather than exclusively in cash. As of April 30, 2026, the conversion prices of the 2027 Notes and 2029 Notes exceed our current Class A common stock price.
Purchase Obligations, Lease Commitments and Other Obligations
As of April 30, 2026, we had non-cancelable contractual purchase obligations of $200.3 million. These purchase obligations primarily include guarantees with contract manufacturers and purchase obligations and other commitments pertaining to our daily business operations.
As of April 30, 2026, we had aggregate future minimum lease payments under non-cancelable operating leases and finance leases of $219.8 million, of which $54.6 million was short-term. Non-cancelable leases include leases that have been executed, but not yet commenced. We lease offices, research and development facilities, and data centers under operating leases expiring through April 2035 and lease certain data center equipment under finance leases.
As of April 30, 2026, we had accrued liabilities related to uncertain tax positions, which are reflected on our consolidated balance sheet. These accrued liabilities are not reflected in the contractual obligations disclosed above, as it is uncertain if or when such amounts will ultimately be settled.
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Capital Return
In August 2023, our Board of Directors authorized the repurchase of up to $350.0 million of our Class A common stock. In August 2025 and April 2026, our Board of Directors approved increases of $350.0 million and $750.0 million, respectively, to the share repurchase authorization. Repurchases will be funded from available liquidity and may be made from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act in accordance with applicable securities laws and other restrictions. The timing and amount of share repurchases will depend upon prevailing stock prices, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, and other factors. The authorization has no expiration date, may be modified, suspended or discontinued at any time, and does not obligate us to repurchase any minimum number of shares. For more information on the share repurchase, refer to Note 8 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Cash Flows
The following table summarizes our cash flows for the periods presented:
Nine Months Ended April 30,
2025 2026
(in thousands)
Net cash provided by operating activities $ 601,927 $ 601,675
Net cash used in investing activities (726,082 ) (107,945 )
Net cash provided by (used in) financing activities 341,119 (543,832 )
Net increase (decrease) in cash, cash equivalents and restricted cash $ 216,964 $ (50,102 )
Cash Flows from Operating Activities
Net cash provided by operating activities was approximately $601.7 million for the nine months ended April 30, 2026, compared to approximately $601.9 million for the nine months ended April 30, 2025. Net cash provided by operating activities remained relatively flat for the nine months ended April 30, 2026, compared to the prior year period, as an increase in net income and higher cash collections were offset by increased cash outflows for prepaid expenses and accrued compensation and benefits.
Cash Flows from Investing Activities
Net cash used in investing activities of approximately $726.1 million for the nine months ended April 30, 2025 included approximately $941.4 million of short-term investment purchases and $59.5 million of purchases of property and equipment, partially offset by approximately $272.8 million of maturities of short-term investments and $2.0 million of sales of short-term investments.
Net cash used in investing activities of approximately $107.9 million for the nine months ended April 30, 2026 included approximately $679.6 million of short-term investment purchases and $38.6 million of purchases of property and equipment, partially offset by approximately $607.5 million of maturities of short-term investments and $2.8 million of sales of short-term investments.
Cash Flows from Financing Activities
Net cash provided by financing activities of approximately $341.1 million for the nine months ended April 30, 2025 included approximately $848.0 million of net proceeds from the issuance of the 2029 Notes and $68.5 million of proceeds from the sale of shares through employee equity incentive plans, partially offset by approximately $257.9 million of repurchases of our Class A common stock, $212.9 million of taxes paid related to the net share settlement of equity awards, $95.5 million related to the partial repurchase of the 2027 Notes, $3.4 million of third-party debt issuance costs related to the issuance of the 2029 Notes, $2.9 million of payments for finance lease obligations, and $2.8 million of issuance costs related to the Revolver.
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NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Net cash used in financing activities of approximately $543.8 million for the nine months ended April 30, 2026 included approximately $433.2 million of repurchases of our Class A common stock and $169.4 million of taxes paid related to the net share settlement of equity awards, partially offset by approximately $61.4 million of proceeds from the sale of shares through employee equity incentive plans.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the applicable periods. We evaluate our estimates, assumptions and judgments on an ongoing basis. Our estimates, assumptions and judgments are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our condensed consolidated financial statements, which, in turn, could change the results from those reported.
There have been no material changes to our critical accounting policies and estimates as compared to those described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2025.
Recent Accounting Pronouncements
See Note 1 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a full description of recent accounting pronouncements.
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