It has been about a month since the last earnings report for Nutanix (NTNX). Shares have added about 15.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nutanix due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
Nutanix Q3 Earnings Surpass Estimates, Revenues Increase Y/Y
Nutanix reported fourth-quarter fiscal 2025 non-GAAP earnings of 37 cents per share, which surpassed the Zacks Consensus Estimate by 15.63% and increased 60.8% year over year.
Nutanix's revenues climbed 19% year over year to $653.3 million from $548.0 million, beating the Zacks Consensus Estimate by 1.63%.
NTNX noted that the average contract term length in the fiscal fourth quarter was 3.2 years, up from 3.1 years reported in the third quarter of fiscal 2025.
Top-Line Details of NTNX
Product revenues (52% of total revenues) increased 28% year over year to $339.8 million.
Support, entitlements & other services revenues (48% of total revenues) rose 11% to $313.5 million.
Subscription revenues (94.3% of total revenues) climbed 19% from the year-ago quarter's figure to $616 million. Professional services revenues (4.4% of total revenues) improved 8% to $28.9 million. Other non-subscription product revenues (1.3% of total revenues) increased 238% to $8.4 million.
Billings were up 8% year over year to $726.9 million. Annual recurring revenues climbed 17% to $2.22 billion.
During the fiscal fourth quarter, Nutanix added 800 customers, taking the total number of clients to 29,290.
Operating Details
In the fiscal fourth quarter, Nutanix's non-GAAP gross margin expanded 140 basis points year over year to 88.3%.
Non-GAAP operating expenses increased 13% year over year to $457.2 million.
Non-GAAP operating income came in at $119.5 million and increased $49.0 million compared with the year-ago quarter.
Non-GAAP operating margin was 18.3%, higher than the guided range of 15.5-16.5% and increased by 540 bps compared to the year-ago quarter.
Balance Sheet & Cash Flow
As of July 31, 2025, cash and cash equivalents plus short-term investments were $1.99 billion, up from $1.88 billion at the end of the third quarter of fiscal 2025.
During the fourth quarter of fiscal 2025, cash generated through operating activities was $219.5 million, and free cash flow was $207.8 million.
Outlook
For the first quarter of fiscal 2026, revenues are estimated between $670 million and $680 million. Non-GAAP operating margin is expected in the band of 19.5-20.5%. The company expects fully weighted average shares outstanding to be approximately 296 million.
For fiscal 2026, revenues are estimated in the range of $2.90-$2.94 billion. The company expects free cash flow in the range of $790-$830 million.
Non-GAAP operating margin is expected to be approximately 21-22%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Nutanix has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock has a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Nutanix has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Nutanix (NTNX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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