Nutanix Q2 Revenue Rises 16%, Margins Expand As Cloud Business Gains Momentum

Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, reported strong second quarter fiscal 2025 financial results, with revenue rising 16% year-over-year (YoY) to $654.7 million and adjusted operating income expanding 270 basis points (bps) YoY to 24.6%. The company's cloud business continues to gain momentum, driving growth and expanding margins.



Key highlights from Nutanix's Q2 results include:

* Revenue rose 16% YoY to $654.7 million, beating the consensus of $641.9 million.
* Annual Recurring Revenue (ARR) grew 19% YoY, reflecting strong customer adoption of the Nutanix Cloud Platform.
* Adjusted gross margin expanded 100 bps YoY to 88.3%.
* Adjusted operating income rose to $161.3 million from $123.9 million a year ago quarter, with the margin expanding 270 bps YoY to 24.6%.
* Adjusted EPS of 56 cents exceeded the consensus of 47 cents.
* Operating cash flow stood at $221.7 million and free cash flow came in at $187.1 million.

Rajiv Ramaswami, President and CEO of Nutanix, attributed the strong performance to the strength of the Nutanix Cloud Platform, demand from businesses looking for a trusted long-term partner committed to innovation and customer care, and go-to-market leverage from partnerships and programs. The company's outlook for the third quarter and fiscal year 2025 also reflects its confidence in continued growth and market opportunities.



Nutanix raised its fiscal year 2025 outlook across all metrics, reflecting confidence in continued growth and market opportunities. The company now expects third-quarter revenue of $620 million-$630 million versus the consensus of $594.385 million and adjusted operating margin of 17% to 18%. For the full year, Nutanix expects revenue of $2.495 billion-$2.515 billion versus the prior outlook of $2.435 billion-$2.465 billion and the estimate of $2.461 billion. The company also expects an adjusted operating margin of 17.5% to 18.5% (prior view 16% to 17%) and free cash flow of $650 million-$700 million (Previous view $560 million-$610 million).

Investors can gain exposure to the stock via ProShares Big Data Refiners ETF DAT and First Trust Cloud Computing ETF SKYY. Nutanix's strong performance in Q2, with robust revenue growth and expanding margins, solidifies its competitive position against other cloud and enterprise infrastructure providers. The company's focus on innovation, strategic partnerships, and customer care has positioned it well to capitalize on the growing demand for hybrid multicloud solutions and subscription-based business models.