Hybrid multicloud computing company Nutanix (NASDAQ: NTNX) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 10% year on year to $703.1 million. On the other hand, next quarter’s revenue guidance of $735 million was less impressive, coming in 1.1% below analysts’ estimates. Its non-GAAP profit of $0.47 per share was 34.1% above analysts’ consensus estimates.
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Nutanix (NTNX) Q1 CY2026 Highlights:
- Revenue: $703.1 million vs analyst estimates of $686.3 million (10% year-on-year growth, 2.4% beat)
- Adjusted EPS: $0.47 vs analyst estimates of $0.35 (34.1% beat)
- Adjusted Operating Income: $156.5 million vs analyst estimates of $115.7 million (22.3% margin, 35.2% beat)
- Revenue Guidance for Q2 CY2026 is $735 million at the midpoint, below analyst estimates of $743.5 million
- Operating Margin: 10%, up from 7.6% in the same quarter last year
- Annual Recurring Revenue: $2.43 billion (14.9% year-on-year growth, beat)
- Billings: $812.9 million at quarter end, up 25.3% year on year
- Market Capitalization: $12.54 billion
StockStory’s Take
Nutanix’s first quarter results were well received by the market, with management pointing to robust customer demand for its hybrid multicloud solutions and a healthy increase in billings. CEO Rajiv Ramaswami credited expanded support for external storage platforms and continued momentum in AI and cloud-native workloads as core drivers of performance. Notably, the company saw increased adoption among new customers, particularly those seeking flexibility in hardware choices amid ongoing supply chain constraints. Ramaswami stated, “Our support of external storage platforms is simplifying migrations to Nutanix...without requiring significant hardware changes.”
Looking ahead, management’s outlook is shaped by persistent hardware supply challenges and evolving customer preferences for deployment flexibility. CFO Rukmini Sivaraman noted that supply-related delays are impacting the timing of revenue conversion, while regional challenges in the Middle East are factored into near-term expectations. The company remains focused on expanding its external storage and AI solutions, with Ramaswami emphasizing, “We expect continued growth as additional solutions become available over the course of the year,” and highlighted the importance of new partnerships and ongoing product innovation to drive future growth.
Key Insights from Management’s Remarks
Management attributed the quarter’s results to strong demand for hybrid cloud solutions, successful expansion of external storage support, and growing traction in AI-powered offerings.
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External storage traction: The rollout of support for external storage platforms enabled customers to migrate from legacy infrastructure without major hardware upgrades, driving notable new wins in healthcare and financial services. Management expects this initiative to become a larger part of the business as additional storage partners come online.
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AI solution momentum: Nutanix’s AI stack, recently enhanced with new features and partnerships, saw increased adoption across regulated industries such as financial services, healthcare, and education. While still early, management views AI as a long-term growth driver.
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Public cloud deployment growth: Customers facing higher server costs and longer lead times increasingly opted for Nutanix’s NC2 deployment on public cloud platforms like AWS and OVH. This trend is expected to persist as flexibility and speed become more important in IT decision-making.
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OEM partner performance: Sales through OEM partners such as Cisco and Lenovo tracked as expected, while Dell showed growth from a small base. The upcoming PowerStore solution is anticipated to further align with Dell’s external storage focus and enhance channel dynamics.
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Contract duration and renewals: The quarter featured a mix of larger, longer-term contracts and strong renewal performance, contributing to higher total contract value bookings and improved business visibility.
Drivers of Future Performance
Nutanix’s guidance reflects ongoing supply chain pressures, expanding external storage offerings, and continued investment in AI and hybrid cloud capabilities.
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Supply chain and hardware availability: Management cautioned that persistent server hardware shortages and elevated prices are expected to continue impacting customer budgets and the timing of project deployments. While some normalization is seen with certain vendors, flexibility in software deployment options is central to mitigating these risks.
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Product innovation and partner expansion: The rollout of new storage integrations (including NetApp and Lenovo) and enhancements to the AI stack are positioned to drive incremental demand. Management believes that as more solutions become available, the addressable market for Nutanix’s platform will expand, especially among enterprises seeking to modernize IT infrastructure.
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Operating efficiency and investment discipline: Sivaraman emphasized ongoing efforts to balance growth investments with margin improvement. While the company is increasing spending in high-opportunity areas, timing of hiring and revenue recognition will influence short-term profitability. Margin expansion is expected to continue, although subject to fluctuations from investment pace and external factors.
Catalysts in Upcoming Quarters
In the coming quarters, our team will closely monitor (1) the pace at which new storage partner integrations, such as NetApp and Lenovo, drive incremental customer wins; (2) the adoption trajectory of Nutanix’s AI and cloud-native offerings, particularly in regulated sectors; and (3) the company’s ability to navigate ongoing supply chain challenges while maintaining growth and margin discipline. Execution on these fronts will be critical for sustaining momentum.
Nutanix currently trades at $48.13, up from $46.80 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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