Nutanix 2025 Q3 Earnings Beats Expectations as Net Income Surges 505.8%

Nutanix (NTNX) reported its fiscal 2025 Q3 earnings on May 28th, 2025. Nutanix exceeded expectations by delivering quarterly earnings of $0.42 per share, surpassing the Zacks Consensus Estimate of $0.38 per share. The company also raised its full-year revenue guidance to $2.52 billion to $2.53 billion, reflecting approximately 17.5% growth year-over-year at the midpoint. This strong performance highlights Nutanix's successful transition to a subscription-based model, contributing to its impressive financial results and outlook.

Revenue

The total revenue of Nutanix increased by 21.8% to $638.98 million in 2025 Q3, up from $524.58 million in 2024 Q3.

Earnings/Net Income

Nutanix returned to profitability with EPS of $0.24 in 2025 Q3, reversing from a loss of $0.06 per share in 2024 Q3 (500.0% positive change). Meanwhile, the company achieved a remarkable turnaround with net income of $63.36 million in 2025 Q3, representing a 505.8% positive swing from the net loss of $-15.62 million in 2024 Q3. Remarkably, in 2025 Q3, the company set a new record high for fiscal Q3 net income, the highest in 11 years. The EPS results indicate a strong financial recovery.

Price Action

The stock price of Nutanix has edged down 0.73% during the latest trading day, has dropped 3.13% during the most recent full trading week, and has surged 17.44% month-to-date.

Post-Earnings Price Action Review

The strategy of buying NTNX when revenue beats expectations and holding for 30 days delivered strong results, with a 238.13% return, significantly outperforming the benchmark. Despite this impressive return, the strategy showed a high maximum drawdown of -64.80%, highlighting the potential risk involved. The Sharpe ratio of 0.59 reflects moderate risk-adjusted returns, suggesting that while the strategy is profitable, it comes with notable volatility. Investors should consider these factors when evaluating the potential benefits and risks of this trading approach. Overall, the strategy offers substantial returns but requires careful risk management due to its inherent volatility.

CEO Commentary

Rajiv Ramaswami, President and Chief Executive Officer, highlighted Nutanix's strong business performance, noting that the company exceeded all guided metrics with an 18% year-over-year growth in ARR to $2.14 billion. He emphasized the strength of the Nutanix cloud platform and demand from customers seeking trusted partners amid industry changes. Ramaswami pointed out significant wins, including a Fortune Global 500 client, showcasing the platform's value in modernizing IT infrastructure. He expressed optimism about ongoing innovation and partnerships, stressing the focus on becoming the leading platform for managing applications and data across hybrid multi-cloud environments.

Guidance

For Q4 fiscal 2025, Nutanix expects revenue between $635 million to $645 million and a non-GAAP operating margin of 15.5% to 16.5%. The full-year revenue guidance has been updated to $2.52 billion to $2.53 billion, reflecting approximately 17.5% growth year-over-year at the midpoint. The non-GAAP operating margin is projected at approximately 20.5%, with free cash flow anticipated between $700 million to $730 million, indicating a free cash flow margin of 28% at the midpoint.

Additional News

In recent weeks, Nutanix announced updates to its Board of Directors, welcoming Eric K. Brandt as a new member, bringing extensive leadership and finance experience to the company. Additionally, Nutanix has partnered with Pure Storage to deliver integrated solutions for mission-critical workloads, further enhancing their cloud offerings. The company also announced the launch of Cloud Native AOS to extend its data platform's value across Kubernetes environments, demonstrating Nutanix's commitment to expanding its technological capabilities and market reach. These strategic moves highlight Nutanix's focus on innovation and strengthening its position in the industry.