Nutanix grows despite hardware price rises. Chris Mellor STORAGE EDITOR Blocks & Files editor Published thu 27 Aug 2026 // 15:30 UTC Nutanix makes growth look so easy, but it's finding trad HCI and VMware-migrating growth are slowing, and it's pivoting to pursue agentic AI systems growth and neocloud customers, with layoffs to help it on its way. Revenues in the quarter ended July 31 were $757.1 million, 16 percent more than a year ago, beating its high end $745 million outlook. Full fy2026 revenues were up12 percent Y/Y to $2.85 billion. GAAP net income for the quarter was $38.7 million, which compares badly to the year-ago's $1.27 billion. But that was distorted by a $1.2 billion one-time non-cash income tax benefit that artificially spiked last year's net income. Full year net income of $188.37 million this year compares to last year's $1.5 billion, affected by the same tax payment. Setting that aside makes fy2025 net income $327.1 million, implying this year's number for Fy2026 is 42.4 percent down. CEO Rajiv Ramaswami was measured in his comment on the quarter: "Our fourth quarter was a strong finish to fiscal 2026, a year in which we delivered solid top and bottom line performance and added over 3,000 new customers. In FY26, we made good progress with respect to partnerships, signing new or enhanced agreements with AMD, Lenovo, NetApp and Nvidia. We also delivered innovation across our cloud platform, especially with respect to AI and broadening our support for external storage." Financial summary * Gross margin: 86.0 percent vs year-ago 87.2 percent * Operating cash flow: $315.0 million vs year-ago $219.5 million * Free cash flow: $277.6 million vs $207.8 million last year * ARR: $2.55 billion vs year-ago $2.20 billion, up 16 percent Nutanix said it beat all its guided metrics for the quarter, and added 650 new customers, taking its total count to 32,360. Jason Ader, a William Blair analyst, said there was revenue growth: "strength driven by large-deal execution (average contract duration of 3.2 years slightly up year-over-year), strong bookings, and growing adoption of newer product offerings (including external storage, NC2, database management, etc.)" Nutanix achieved a Rule of 40 score of 42 (revenue growth + free cash flow margin), marking the company's third consecutive year above 40. Its 10-year average net promoter score is 90, which puts Everpure's most recent 84 score in context. Nutanix announced a 5 percent workforce reduction earlier this month, meaning around 400 jobs would go. This was, it said, "intended to streamline and realign the Company's organizational structure, improve operational efficiency and agility, and reallocate resources toward strategic priorities and long-term growth objectives." It "expects to substantially complete the workforce reduction by the end of October 2026." Ader commented: "Management views neoclouds as an incremental route to market for enterprise AI deployments and expects ecosystem expansion to remain a key focus in fiscal 2027, with restructuring savings being reinvested in sales capacity, strategic partnerships, and broader adoption of its Agentic AI offerings." Nutanix is also porting its software to Arm processors as it wants to help lower its customers' hardware costs. Next quarter's revenue outlook is $760 million +/- $5 million, a 13.3 percent mid-point rise, and lower growth than this quarter's 16 percent. The outlook for all of fy2027 is $3.205 billion +/- $25 million, a 12.5 percent rise at the mid-point; an even lower growth rate. Ader dived deeper into the outlook and commented: "While management remains constructive on underlying demand trends across the core business as newer growth vectors emerge, the fiscal 2027 guide embeds several factors of conservatism to account for various timing and deployment-related issues. These include: * Continued server supply constraints, elevated lead times, and additional hardware price increases - all of which could impact the size and timing of customer projects and/or result in a higher mix of future-start-date deals; * A fiscal 2027 renewals ACV cohort that is expected to grow at a slower rate year-over-year as the renewals base becomes larger over time; * The impact of the recently announced 5 percent workforce reduction, with management expecting to reinvest the majority of associated savings in various go-to-market investments; * A free cash flow headwind from approximately $38 million of restructuring charges at the midpoint ($32.5 million expected to be paid in cash during the first quarter of fiscal 2027 at the midpoint) and greater customer payment flexibility through annual payment structures and third-party financing (despite the vast majority of customers continuing to pay multiple years of cash upfront).

Nutanix launches Enterprise AI 2.8 with MCP Gateway for governed agentic AI. Nutanix has launched Nutanix Enterprise AI (NAI) 2.8, adding a generally available Model Context Protocol (MCP) Gateway designed to govern how artificial intelligence agents connect with enterprise applications and data. The company said NAI 2.8 is available now as part of a broader expansion of its Nutanix Cloud Platform for production AI. Nutanix Kubernetes Platform (NKP) 2.19 is also planned for release soon, with features aimed at running AI applications across virtualized and bare-metal environments. MCP Gateway targets agent access to tools and data. The main addition in NAI 2.8 is the MCP Gateway within Nutanix Agent Gateway. MCP has emerged as a standard way for AI agents and assistants to connect with external tools, applications and data sources. As enterprises expose more internal systems through MCP, access control and visibility over those connections become part of the deployment challenge. Nutanix said its gateway provides a centralized layer for governing agent access to applications and data. The company is also offering an MCP Server for Nutanix Cloud Platform so customers can build agentic applications that interact with infrastructure managed by Nutanix. The release also expands Nutanix Private Inference, including support for parameter-efficient fine-tuning using Low-Rank Adaptation for smaller models, multi-GPU inference through tensor parallelism, batch inference and speculative decoding. Nutanix said speculative decoding can accelerate token generation by up to 2.5 times, although actual performance will depend on model, hardware and workload configuration. Security features highlighted by Nutanix include fine-grained identity and access management, custom roles, model sharing controls and support for air-gapped NVIDIA NIM deployments. The company is positioning these controls around the need to limit the scope of what AI agents can access as they move from experimentation into production workflows. Nutanix links AI adoption to mixed VM and container environments. Nutanix is also emphasizing what it calls a dual-native architecture, where virtual machines and containers can be managed through a common platform. The company argues that this matters because enterprise applications and data often remain distributed across traditional virtualized systems while newer AI workloads increasingly run in containerized environments. Rather than requiring customers to rearchitect existing applications before deploying AI, Nutanix said its approach is intended to let organizations place AI workloads closer to the systems and data they already operate. Jay Tuseth, vice president and general manager for Asia Pacific and Japan at Nutanix, said organizations in the region are under pressure to move AI from experimentation into business use while continuing to support existing infrastructure. He said customers are looking for ways to scale AI with governance, security and operational consistency without undertaking large rearchitecture projects. The approach also builds on Nutanix's earlier positioning around infrastructure fragmentation in Asia Pacific, where enterprises often operate a mix of legacy applications, virtualized environments, containers and cloud services. NKP 2.19 and partner programs are next. NKP 2.19, which Nutanix says will be available soon, is expected to add simplified container management across bare metal and virtualized environments. Planned features include NKP Metal for bare-metal Kubernetes, an AI applications catalog for deploying software such as Kubeflow, Milvus and Slurm, and broader hardware and GPU support. Nutanix said NKP has also received Cloud Native Computing Foundation Kubernetes AI Conformance certification. As with other upcoming NKP 2.19 features, availability and final functionality remain subject to the product's release. Alongside the product updates, Nutanix has made Service Provider Central generally available and introduced a Powered by Nutanix Verified Services program for partners building infrastructure, cloud-native and AI services. The company is pitching the combined changes as a way to support production AI without separating AI infrastructure from the rest of the enterprise application estate. For organizations evaluating agentic AI platforms, the more immediate question will be how consistently the new controls work across existing identity, application and data environments, particularly as MCP connections increase the number of systems an AI agent can reach.

Nutanix has built a $20 million on-premises AI cluster to reduce reliance on external AI tools like Copilot and Claude, with CEO Rajiv Ramaswami expecting to recoup the investment within a year. The company initially used external AI coding tools, but usage and costs exploded. By switching to open-weight models and its own infrastructure, Nutanix eliminated per-token fees. Some users still access frontier models when necessary. The company also revealed progress on porting its stack to Arm architecture, aimed at reducing hardware costs for customers. Ramaswami said Arm support will enable operation on lower-cost hardware. Nutanix reported Q4 revenue of $757 million, up 16 per cent year-over-year. Full-year revenue reached $2.85 billion, a 12 per cent increase. The company added 3,000 new customers during the financial year.