Nutanix 2026 Q1 Earnings Strong Net Income Growth of 107.5%

Nutanix (NTNX) reported mixed Q1 2026 results, with revenue falling short of estimates despite a 13.5% year-over-year increase. The company lowered full-year revenue guidance to $2.82–$2.86 billion, reflecting deferrals and OEM shipment delays. Shares dropped 10.67% post-earnings, marking a sharp reversal from the stock’s positive historical performance after revenue declines.

Revenue

Nutanix’s total revenue rose 13.5% year-over-year to $670.58 million in Q1 2026, driven by robust demand for its hybrid multicloud solutions. Product revenue totaled $349 million, while support, entitlements, and other services generated $321.57 million, underscoring the company’s recurring revenue strength.

Earnings/Net Income

Earnings per share (EPS) surged 109.1% to $0.23 in Q1 2026, a significant outperformance compared to $0.11 in the prior-year period. Net income also saw substantial growth, reaching $62.10 million—a 107.5% increase from $29.93 million in Q1 2025. This marked a new 12-year high for Q1 net income, reflecting improved profitability.

Post-Earnings Price Action Review

The strategy of buying Nutanix shares after a quarterly revenue drop and holding for 30 days delivered exceptional returns over the past three years, achieving a 125.54% total return versus a 65.99% benchmark. This 59.55% excess return highlights the stock’s ability to capitalize on positive momentum post-earnings declines, with a compound annual growth rate (CAGR) of 31.43% and a Sharpe ratio of 0.74, indicating strong risk-adjusted performance.

CEO Commentary

CEO Rajiv Ramaswami emphasized “solid performance” in Q1 2026, noting 18% annual recurring revenue (ARR) growth to $2.28 billion. While late-quarter deferrals impacted revenue recognition, he reaffirmed confidence in the company’s long-term fundamentals, including strategic partnerships with Dell and Cisco and advancements in Kubernetes and GenAI.

Guidance

Nutanix revised full-year 2026 revenue guidance downward to $2.82–$2.86 billion, citing deferrals and OEM partner delays. However, free cash flow guidance was raised to $800–$840 million, reflecting a 28.9% margin. Q2 revenue is projected at $705–$715 million, below the $749 million consensus, as supply chain challenges and migration timing pressures persist.

Additional News

Nutanix expanded hybrid multicloud partnerships with Dell and Cisco, enhancing its platform capabilities in Kubernetes and GenAI. The company also announced plans to integrate Dell’s Power Store and Pure Storage FlashArray, broadening its product offerings. Additionally, Nutanix was named a leader in the 2025 Gartner Magic Quadrant for distributed hybrid infrastructure, underscoring its industry recognition.

The stock’s recent underperformance, with an 18.77% decline over 12 months, contrasts with its strong earnings momentum. Analysts remain divided, with five upward and eight downward EPS revisions in the last 90 days, reflecting uncertainty around deferral dynamics and supply chain risks. Investors are advised to monitor the company’s ability to convert bookings into revenue and maintain its competitive edge in the hybrid cloud market.