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Nutanix (NTNX) Down 1.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Nutanix (NTNX - Free Report) . Shares have lost about 1.3% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nutanix due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Nutanix Q2 Earnings and Revenues Beat Estimates, Sales Rise Y/Y
Nutanix 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -59.26% due to these changes.
VGM Scores
Currently, Nutanix has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% 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 broadly 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) Down 1.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Nutanix (NTNX - Free Report) . Shares have lost about 1.3% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nutanix due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Nutanix Q2 Earnings and Revenues Beat Estimates, Sales Rise Y/Y
Nutanix 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -59.26% due to these changes.
VGM Scores
Currently, Nutanix has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% 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 broadly 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.