Nutanix Q2 Earnings and Revenues Beat Estimates, Sales Rise Y/Y

Nutanix NTNX reported second-quarter fiscal 2026 non-GAAP earnings of 56 cents per share, which surpassed the Zacks Consensus Estimate by 27.27% and increased 19.1% year over year.

Nutanix’s revenues climbed 10.4% year over year to $722.8 million, beating the Zacks Consensus Estimate by 1.27% and the guided range of $705-$715 million.

The top line was driven by more than 1000 new customers landing on the company’s platform through various incentive programs, increased customer engagement considering NTNX as an alternative amid industry M&A, and stronger support from its OEM partners, such as CSCO, Dell or Lenovo, and an integrated offering partnered with Supermicro.

NTNX noted that the average contract term length in the fiscal second quarter was 3.1 years, largely in line with the company’s expectations.

Top-Line Details of NTNX

Product revenues (53.6% of total revenues) increased 9.4% year over year to $387.4 million. Support, maintenance & other services revenues (46.4% of total revenues) rose 11.6% to $335.5 million.

Subscription revenues (95.5% of total revenues) climbed 10.6% to $690.5 million from the year-ago quarter’s figure. Professional services and other revenues (4.5% of total revenues) improved 6.6% to $32.3 million. 

Annual recurring revenues climbed 16% year over year to $2.36 billion.

During the fiscal second quarter, Nutanix added more than 1000 customers, representing its strongest quarterly new logo additions in eight years.

NTNX’s Operating Details

In the fiscal second quarter, Nutanix’s non-GAAP gross margin expanded 30 basis points year over year to 88.6%.

Non-GAAP operating expenses increased 8.2% year over year to $451.2 million.

Non-GAAP operating income was $189 million, up $27.7 million from the year-ago quarter.

Non-GAAP operating margin was 26.2%, above the guided range of 20.5-21.5% and increased 160 bps compared to the year-ago quarter. This was driven by better-than-expected revenues and lower operating expenses related to the timing of hiring.

NTNX’s Balance Sheet & Cash Flow

As of Jan. 31, 2025, cash and cash equivalents plus short-term investments totaled $1.87 billion, down from $2.06 billion at the end of the first quarter of fiscal 2026.

During the second quarter of fiscal 2026, cash generated from operating activities was $197.3 million, and free cash flow was $191.4 million.

Nutanix Offers Q3 and FY26 Outlook

For the third quarter of fiscal 2026, revenues are estimated between $680 million and $690 million. Non-GAAP operating margin is expected in the band of 16-17%. The company anticipates the fully weighted average shares outstanding to be approximately $288 million.

For fiscal 2026, revenues are estimated in the range of $2.80-$2.84 billion. The company expects free cash flow in the range of $745-$775 million.

Non-GAAP operating margin is projected in the 21-22% band.

Zacks Rank and Stocks to Consider

Currently, NTNX carries a Zacks Rank #3 (Hold).

Micron Technology MU, MongoDB MDB, and Credo Technology Group CRDO are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector.

Micron Technology shares have gained 342% in the past 12 months. This Zacks Rank #1 (Strong Buy) company is scheduled to release second-quarter 2026 results on March 18. MongoDB shares have returned 24.5% in the past 12 months. MDB is scheduled to release its fourth-quarter 2026 results on March 2. The company currently sports a Zacks Rank #1.  
 
Credo Technology Group shares have gained 106% in the past 12 months. CRDO is set to report its third-quarter fiscal 2026 results on March 2. The company currently sports a Zacks Rank #1.