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.”
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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: $15 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Nutanix’s Q1 Earnings Call
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Matt Martino (Goldman Sachs): Pressed on whether customers are better equipped to navigate supply chain issues and if software-hardware decoupling smooths deal conversion. CEO Rajiv Ramaswami explained customers are adapting by seeking flexible licensing and alternative deployment options, with Nutanix supporting migrations through external storage and public cloud.
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Param Singh (Oppenheimer & Co.): Asked about incremental recurring revenue from external storage deals and competitive pricing against VMware. Ramaswami stated the offering is priced to capture full-stack value and is growing rapidly, though currently a smaller revenue contributor.
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James Fish (Piper Sandler): Inquired about the impact of higher server costs on the uptake of NC2 public cloud deployments. Ramaswami acknowledged server constraints are driving customers to public cloud, resulting in incremental NC2 growth.
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Wamsi Mohan (Bank of America): Sought clarification on revenue deferral due to supply constraints and the sustainability of higher margins. Sivaraman noted revenue timing is affected by hardware availability, and margin gains partly reflect timing of investments, with a focus on long-term efficiency.
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Jim Long (Barclays): Queried competitive positioning versus VMware and early AI solution traction. Ramaswami responded that most new customers are migrating from VMware, and AI offerings are in early stages but show encouraging signs across several industries.
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 $54.75, up from $46.57 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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