NTNX 10-K & 10-Q changes, risk factors and insider trading

Risks Related to Our Business and Industry our ability to achieveexecute our business plans, vision, and objectives,strategy, including our growth andinitiatives, go-to-market strategies,strategy, successfullyinvestments in new products and intechnologies, aand timelyefforts mannerto expand our market opportunity;

our ability to capitalize on opportunities arising from changes within the VMware ecosystem following Broadcom’s acquisition of VMware and related changes to its product portfolio and business model;

our ability to addressattract, customer needsretain and expand orcustomers, maintain ourrenewals and increase customer baseadoption of our platform, products and services;

our ability to develop, enhance, support and maintain our platform, solutions, products, services, and technology, including their interoperability andwith third-party technologies, the availability with and onof third-party platformsresources and technologies, anyand undetectedthe defectssuccessful inexecution of our solutions, and current and future product roadmaps, including expanding our artificial intelligence-relatedAI-related capabilities;

Risks Related to Employee Matters our reliance on key personnel and ability to attract, train,integrate, incentivize,develop, retain,motivate and/or ramp to full productivity,retain qualified employeesemployees, executives and other key personnel.personnel, and maintain an effective and productive workforce, including our sales organization.

Risks Related to Our Convertible Senior Notes and Revolving Credit Facility our ability to serviceservice, andrefinance, repurchase or repay our indebtedness, including our outstanding convertible notes,notes includingand theany sufficiencyborrowings ofunder our cash,revolving orcredit our ability to raise necessary funds, to settle conversions of the notes, repay the notes at maturity, or repurchase the notes upon a fundamental changefacility;

Risks Related to Ownership of our Securities any volatility and decline in the market price and/or trading volume of our securities, including asdue ato resultchanges ofin financialour oroperating industryperformance, our ability to meet our publicly announced guidance and other investor expectations, analyst reportscoverage orand abroader lackmarket thereofconditions;

anydilution dilutiveresulting impactfrom ofequity actualcompensation, orfuture perceivedequity issuances, sales of substantial amounts of our securitiessecurities, inshare-settled the public marketsobligations and/or the conversion of our outstanding convertible notes;

Our business, operations and performance are dependent in part on worldwide market, economic and financial conditions and events that may be outside of our control, such as global, regional, and local economic developments, fiscal, monetary and tax policies, high inflation, elevated interest rates, recessionary pressures, political and social unrest, geopolitical tensions, the evolving policy landscape following the 2024 U.S. elections and related shiftschanges in domestic and international policy,governmental policies and priorities, terrorist attacks, hostilities or the perception that hostilities may be imminent, military conflict, war, including the ongoing military conflict in Ukraine and related sanctions, the continuing conflictconflicts in the Middle East, including the conflict involving Iran, malicious human acts, climate change, natural disasters (including extreme weather), pandemics or other major public health concerns, and other similar events. These conditions and events may adversely affect demand for enterprise computing infrastructure solutions and reduce the economic health and IT spending budgets of our current and prospective end customers. The global macroeconomic environment has been, and may continue to be, inconsistent, challenging and unpredictable due to international trade disputes or tensions, the imposition or expansion of tariffs (including those imposed by the U.S. government targeting imports from numerous countries, which may increase the cost of IT products and services and thereby reduce available IT budgets or shift spending priorities away from our solutions), restrictions on sales and technology transfers, elevated interest and inflation rates, uncertainties related to changes in public policies such as domestic and international regulations and fiscal and monetary stimulus measures, and taxes, potential changes to international trade agreements, actual or potential government shutdowns, elections and any related political instability, geopolitical turmoil and civil unrest, instability in the global credit markets, and other disruptions to global and regional economies and markets.

We operate in the intensely competitive cloud infrastructure, platform services and enterprise AI markets and compete with a broad range of companies that sell software and hardware to build and operate private clouds, integrated systems, standalone storage and servers, and platforms supporting modern and agentic AI workloads, as well as cloud services providers and managed service providers. These markets are characterized by constant change, rapid innovation, and evolving licensing and consumption models. Competition generally varies by workload and customer segment, and customers often evaluate multiple alternatives simultaneously. Several of our competitors are also our partners, resellers, or OEMs in certain offerings. As the market in which we compete continues to develop, we expect it will continue to attract new companies as well as existing larger vendors. Some of our competitors may also expand their product and service offerings, acquire or invest in competing businesses or emerging technologies,technologies (including agentic AI and AI factories), offer lower pricing or aggressive discounting, bundle their products with other products and capabilities (including artificial intelligence,AI, machine learning, generative AI, and emerging agentic AI capabilities), provide closed technology platforms, partner with other companies to develop joint solutions, or otherwise leverage their scale, brand recognition or ecosystem relationships to gain a competitive advantage. Furthermore, as we expand our product offerings, we may expand into new markets, and we may encounter additional competitors in such markets. Additionally, as companies increasingly offer competing solutions, they may be less willing to cooperate with us as an OEM or otherwise.

In addition, in recent years, an increasing number of customers have been allocating their IT spending toward artificial intelligence,AI, machine learning, and generativeagentic AI capabilities. The IT infrastructure market for artificial intelligence,AI, machine learning, and generativeagentic AI workloads is also expected to be an intensely competitive and rapidly evolving market.

In addition, weWe have estimated the size of our total addressable and serviceable available markets based on internally generated data and assumptions, as well as data published by third parties, which we have not independently verified. While we believe these estimates are reasonable, such information is inherently imprecise and subject to a high degree of uncertainty. If our third-party or internally generated data prove to be inaccurate or we make errors in our assumptions based on that data, our actual market may be more limited than our estimates. In addition, these inaccuracies or errors may cause us to misallocate capital and other critical business resources, which could harm our business. Even if our total addressable market meets our size estimates and experiences growth, we may not continue to grow our share of the market.

Over time, our sales pipeline has evolved to include a higher mix of larger deal opportunities. Sales to these end customers involve risks that may not be present, or that are present to a lesser extent, with sales to smaller end customers. Large enterprise transactions generally involve longer and less predictable sales cycles, greater competition, increased customer negotiating leverage, more demanding contractual, implementation, support and acceptance requirements, greater payment flexibility, and increased variability in transaction timing, structure and outcomes. These risksfactors include:may increase our costs of pursuing and supporting such opportunities and may delay revenue recognition or cash collections.

Large organizations often undertake a significant evaluation processprocess, thatand resultscustomers inmay aevaluate lengthymultiple salesvendors cycle.and consumption models simultaneously. Although we have a channel sales model, our sales representatives typically engage in direct interaction with our prospective end customers as well as our distributors and resellers. We typicallymay provide evaluation products to these end customers and may spend substantial time, effort and money inwithout ourassurance salesof effortsa tosale. these prospective end customers. In addition, productSuch purchases may be delayed by large organizations are frequently subject to budget constraints, multiple approvals andapprovals, unanticipated administrative, processing and other delays.delays, Finally,or customers' infrastructure refresh cycles. In addition, large organizationscustomers typically have longer implementation cycles,often require greater productbroader functionality and scalability,services, requireextensive contractual commitments and pricing concessions, which can further extend sales cycles and make it difficult to predict whether and when a broadertransaction rangewill ofclose services,or demandwhen that vendors take on a larger share of risks, require acceptance provisions that can lead to a delay inrelated revenue recognition, expect greater payment flexibility (which may delayor cash collectionsflows and negatively impact our free cash flow), and may also have a greater ability to resist any attempts to pass on increases in our operating and procurement costs. Given these variables, it canwill be difficult for us to estimate when an expected sale from a large organization, service provider or government entity may occur, and our ability to accurately forecast our future operating results may be adversely affected.recognized. If we fail to realize an expected sale from a large end customer in a particular quarter or at all, our business and operating results could be adversely affected. All of these factors can add further risk to business conducted with these end customers.

As part of our strategy to expand our addressable market and meet the needs of customers invested in legacy three-tier IT infrastructure, we recentlyhave expanded our offerings to include support for qualified third-party external storage platforms. While we believe this flexibility may facilitate customer adoption of our platform in brownfield environments and enable longer-term expansion opportunities, it may alsochange negativelythe impactmix, timing or economics of our sales, including by reducing sales of our core HCI offering. In addition, support forSupporting external storage may increase the complexity of our offerings and require additional resources for integration, testing, and customer success. It also increases our reliance on third-party technologies, over which we have limited control. If these third-party platforms experience performance issues, customer dissatisfaction, or changes in strategic direction that affect interoperability with our solutions, our reputation and customer relationships could be negatively impacted. Furthermore,If ifcustomer customersadoption adoptor the resulting sales mix differs from our solutions to support external storage as a permanent architecture rather than as a transitional step toward full HCI adoption,expectations, our investment in this capability may not yield the anticipated return, which could adversely affect our operating results.

Nutanix, Inc. ("we," "us," "our," or "Nutanix") is a hybrid multicloudcloud computingand leader,AI platform company, offering organizations a unified infrastructure software platform forto runningrun applicationsapplications, data, and AI and managing data anywhere. Our vision is to simplify the deployment and operation of hybrid computing infrastructure and AI factories to support the increasingly distributed landscape of apps and datadata, including agentic AI, while freeing organizations to modernize their infrastructure and focus on business goals. Our mission is to delight customers with an open, secure platform with rich data services that increases their ability to take advantage of new technologies such as cloud native and AI, optimizes how they run their organizations today, and accelerates innovation, efficiency, and growth.

The Nutanix Cloud Platform is designed to enable organizations to build hybrid multicloudcloud infrastructure,infrastructure. providingIt provides a consistent cloud operating model with a single platform for running applications and managing applications, agentic AI workloads, and data in core data centers, at the edge, and in public clouds,clouds. whileWe supportingaim customerto provide customers with flexibility and choice across server platforms, storage options, publicvirtualized and managedcloud-native environments, public clouds, and containerdeployment and virtualization platforms.models. The Nutanix Cloud Platform supports a wide variety of workloads with varied compute, storage, and network requirements,requirements. includingThese workloads include traditional business-critical general-purpose applications, modern applications (including containerized applications running on Kubernetes), data platforms (including SQL, NoSQL,NoSQL and vector databasesdatabases, andas well as business intelligence applications), and enterprise AI workloads (including machine learning, generative AI, and agentic AI), general-purpose workloads (including system infrastructure, networking, and security), end-user computing and virtual desktop infrastructure services, and cloud native applications (including modern, containerized applications).

Our business is organized into a single operating and reportable segment. We operate a subscription-based business model, meaning one in which our products, including associated support and entitlementmaintenance arrangements, are sold with a defined duration.

Our platform typically includes one or more years of support and entitlements,maintenance, which provides customers with the right to software upgrades and enhancements as well as technical support. Purchases of term-based licenses and software-as-a-service ("SaaS") subscriptions have support and entitlementsmaintenance included within the subscription fees and are not sold separately. Purchases of non-portable software are typically accompanied by the purchase of separate support and entitlements.

We had a broad and diverse base of over 29,00032,000 end customers as of July 31, 2025.2026. We define the number of end customers as the number of end customers for which we have received an order by the last day of the period, excluding partners to which we have sold products for their own demonstration purposes. A single organization or customer may represent multiple end customers for separate divisions, segments,segments or subsidiaries, and the total number of end customers may contract due to mergers, acquisitions, or other consolidation among existing end customers.

Our solutions are primarily sold through our channel partners or original equipment manufacturers ("OEMs") and delivered directly to our end customers. We have end customers across a broad range of industries, such as automotive,financial services, retail, manufacturing, public sector, automotive and other transportation, consumer goods, education, energy, financial services, healthcare, manufacturing, media, public sector, retail, technology, and telecommunications. We also sell to service providers, who utilize our platform to provide a variety of cloud-based services to their customers.

Subscription revenue — Subscription revenue includes any performance obligation which has a defined duration and is generated from the sales of software entitlementmaintenance subscriptions, support subscriptions, subscription software licenses and cloud-based SaaS offerings.

Ratable — We recognize revenue from software entitlementmaintenance subscriptions, support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlementmaintenance subscriptions and support subscriptions. These offerings represented approximately $905.8$1,029.0 million, $1,029.0$1,138.4 million and $1,138.4$1,299.7 million of our subscription revenue for fiscal 2023,2024, 20242025 and 2025,2026, respectively.

Upfront — RevenueWe generally recognize revenue from our subscription software licenses is generally recognized upfront upon the transfer of control to the customer,customer. whichFor happenssales of our software purchased alongside a server from an OEM or other partner, revenue is typically recognized upon shipment of the server. For software sold separately from a server, revenue is typically recognized when we make the software is made available to the customer. These subscription software licenses represented approximately $825.0$987.8 million, $987.8$1,272.4 million and $1,272.4$1,412.6 million of our subscription revenue for fiscal 2023,2024, 20242025 and 2025,2026, respectively.

Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed. Professional services revenue was approximately $100.9 million, $112.2 million, and $126.6 million for fiscal 2024, 2025 and 2026, respectively.

In addition to GAAP metrics, we regularly monitor ARR, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss),income, non-GAAP operating margin, and free cash flow, and total end customers, which are non-GAAP financial measures and key performance measures, to help us evaluate our growth and operational efficiencies, measure our performance, identify trends in our sales activity, and establish our budgets. We evaluate these measures because they:

ARR is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the top-line growth of our subscription business (including our ability to acquire subscriptions with new customers and to retain and expand with existing customers), while normalizing for differences in contract durations. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss),income, and non-GAAP operating margin are performance measures which we believe provide useful information to investors, as they provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures, such as stock-based compensation expense, that may not be indicative of our ongoing core business operating results. Free cash flow is a performance measure that we believe provides useful information to management and investors about the amount of cash generated by the business after capital expenditures. We use these non-GAAP financial and key performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons.

Non-GAAP financial measures have limitations as analytical tools and they should not be considered in isolation or as substitutes for analysis of our results as reported under generally accepted accounting principles ("GAAP") in the United States. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, and free cash flow are not substitutes for gross profit, gross margin, operating expenses, operating income (loss),income, operating margin, or net cash provided by (used in) operating activities, respectively. There is no GAAP measure that is comparable to ARR, so we have not reconciled ARR numbers included in this Annual Report on Form 10-K to any GAAP measure. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures and key performance measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures and key performance measures as tools for comparison. We urge you to review the reconciliation of our non-GAAP financial measures and key performance measures to the most directly comparable GAAP financial measures included below and not to rely on any single financial measure to evaluate our business.

ARR — We calculate ARR as the sum of annual contract value ("ACV") for all subscription contracts from all customers in effect as of the end of a specific period, assuming any subscription contract that expires is renewed on its existing terms. ARR excludes the period.value of professional services, non-portable software and support contracts and hardware sales. For the purposes of this calculation, we generally assume that the contract term begins on the date awhen contractthe software is booked,made unlessavailable to the terms of such contract prevent us from fulfilling our obligations until a later period, and irrespective of the periods in which we would recognize revenue for such contract. ARR excludes all life-of-device contracts. We definecustomer. ACV is defined as the total annualized value of a contract,contract. excluding amounts related to professional services and hardware. We calculate theThe total annualized value for a contract is calculated by dividing the total value of the contract by the number of years in the term of such contract. Beginning with the first quarter of fiscal 2026, our methodology for calculating ARR will bewas updated to align more closely with the timing of when licenses are made available to customers. Our calculation of ARR is not adjusted for the impact of any known or projected future events (such as customer cancellations, expansion or contraction of existing customers relationships or price increases or decreases) that may cause any subscription contract not to be renewed on its existing terms. ARR is a performance measure that should be viewed independently of revenue and does not represent our revenue under GAAP on an annualized basis or a forecast of GAAP revenue. Investors should not place undue reliance on ARR as an indicator of our future or expected results. ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled performance measures presented by other companies.

Non-GAAP operating income and Non-GAAP operating margin — We calculate non-GAAP operating margin as non-GAAP operating income divided by total revenue. We define non-GAAP operating income as operating income (loss) adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, litigation settlement accruals and legal fees related to certain non-ordinary course litigation matters, and costs associated with certain other non-recurring transactions. Our presentation of non-GAAP operating income and non-GAAP operating margin should not be construed as implying that our future results will not be affected by any recurring expenses or any unusual or non-recurring items that we exclude from our calculation of these non-GAAP financial measures.

Free cash flow — We calculate free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment, which measures our ability to generate cash from our business operations after our capital expenditures.

We plan to continue investing in initiatives that support our long-term growth, while also focusing on improvingdriving operational efficiencies and prioritizing resources across our operating cash flow through operational efficiencies,business, including in our go-to-market functions. ByConsistent maintainingwith thisthese balance,objectives, we believeregularly weevaluate canthe sustainallocation profitableof growth.resources across our business and expect to continue directing investments toward strategic growth areas, including our agentic and other AI solutions, cloud-native offerings, sales capacity and digital sovereignty-related offerings and capabilities.

Investment in Sales and Marketing – Our ability to drive top-line growth depends, in large part, on our ability to capitalize on our market opportunity, including our ability to recruit, train and retain sufficient numbers of ramped sales personnel. We plan to continue investingmaking targeted investments in sales and marketing functions, including initiatives focused on opportunities with major accounts, large deals, and commercial accounts, as well as other initiatives to increase our pipeline growth.growth and support customer adoption of our broader platform capabilities. As we continue to recruitinvest additionalin sales representatives,capacity and customer-facing resources, it will take time to train and ramp thempersonnel to full productivity. AsThese ainvestments result,may we expect thatincrease our overall sales and marketing expenseexpense, willalthough increaseproductivity ininitiatives, theoperational nearefficiencies term.and resource reallocations may offset a portion of such increases. We estimate, based on past experience, that our average sales team members typically become fully ramped up around the start of their fourth quarter of employment with us, and as our newer employees ramp up, we expect their increased productivity to contribute to our revenue growth. As we continue to focus some of our newer and existing sales team members on major accounts and large deals, and as we operate our subscription-based business model, it may take longer, potentially significantly, for these sales team members to become fully productive, and there may also be an impact to the overall productivity of our sales team. As part of our overall efforts to improve our freeoperating cash flowmargin performance, we have also proactively taken steps to increase our go-to-market productivity and over time, we intend to reduce our overall sales and marketing spend as a percentage of revenue. These measures include addressing a growing mix of renewals, which have a lower cost than landing new customers or expanding into our existing customer base, improving the efficiency of our demand generation spend, increasing leverage of our channel partners and OEMs, including supporting new OEMs, and optimizingaligning headcountour insales geographiesand basedmarketing onresources with market opportunities.

Investment in Research and Development – We plan to continue investing in our global research and development teams to support enhancements to our solutions, improve integration with ecosystem partners and expand the range of technologies and features available through our platform. These investments are intended to strengthen our core offeringsofferings, expand platform capabilities and ecosystem integrations, and enable us to respond to evolving technology trends, including developments in generative AIand agentic AI, cloud-native offerings and modern applications across hybrid and multicloud environments.

We believe that these investments will support our long-term growth strategy, although they may result in increased expensesexpenses, may not produce the anticipated benefits, and may limit or adversely affect our profitabilityprofitability, inoperating themargins nearor term.cash flow.

We operate a subscription-based business model to provide our customers with the flexibility to choose their preferred license levels and durations based on their specific business needs. A subscription-based business model means one in which our products, including associated support and entitlementmaintenance arrangements, are sold with a defined duration. Subscription-based sales consist of subscription term-based licenses and offerings with ongoing performance obligations, including software entitlementmaintenance subscriptions, support subscriptions and cloud-based SaaS offerings. Revenue from subscription term-based licenses is generally recognized upfront upon transfer of control to the customer, which occurs when we make the software available to the customer. Accordingly, any reduction in the total average contract duration of our subscription term-based licenses would decrease the amount of license revenue recognized upfront and could adversely affect our revenue for the applicable period. Revenue from software entitlementmaintenance subscriptions, support subscriptions and cloud-based SaaS offerings is recognized ratably over the contractual service period. Accordingly, any decline in such subscriptions, whether new subscriptions or renewals, in any given fiscal quarter may not be fully or immediately reflected in our revenue for that quarter. For additional information on revenue recognition, see Note 2 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K and "Critical Accounting Estimates" later in this "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section.

We plan to continue to leverage our relationships with our channel and OEM partners and expand our network of cloud and ecosystem partners, all of which help to drive the adoption and sale of our solutions with our end customers. We sell our solutions primarily through our partners, and our solutions primarily run on hardware platforms that our customers often choose to purchase from our channel or OEM partners. We believe that increasing channel leverage, particularly as we expand our focus on opportunities in commercial accounts, by investing in sales enablement and co-marketing with our channel and OEM partners inover the long term will extend and improve our engagement with a broad set of end customers. Our reliance on manufacturers, including our channel and OEM partners,manufacturers to produce the hardware platforms on which our software typically runs exposes us to supply chain delays, which could impair our ability to providedeliver servicessolutions to end customers in a timely manner.manner, particularly to the extent that current supply and pricing dynamics continue. Beginning in the latter half of the second quarter of fiscal 2026, constraints affecting the availability of certain hardware components at manufacturers became increasingly acute. These constraints have resulted in higher hardware pricing in the market and extended hardware lead times, which vary across hardware vendors. Higher hardware pricing, together with extended hardware lead times, have impacted, and may continue to impact, customers' ability to deploy and consume our software, which affects the timing of revenue recognition and cash flows from period to period and, in certain instances, may result in some customers delaying projects or otherwise seeking greater flexibility with licensing. Our software platform provides customers with flexibility and choice across deployment options, including hardware vendors, public cloud environments, and a growing set of external storage options, which can help enable customers to better manage how and when they deploy our solutions in periods of supply and pricing volatility. While a majority of our customer transactions involve a software‑only fulfillment motion, in a subset of transactions, customers previously purchased our software in connection with Nutanix‑branded NX‑series hardware platforms. To provide customers in these transactions with greater flexibility when facing extended hardware lead times, beginning in the third quarter of fiscal 2026, we enabled these customers to purchase our software independently of hardware delivery, thereby aligning software provisioning for these transactions with our existing software‑only fulfillment motion. This may impact the timing of revenue recognition and our ARR. Our business and results of operations will be significantly affected by our success in leveraging our relationships with our channel and OEM partners and expanding our network of cloud and ecosystem partners.

Our business and operating results will depend on our ability to obtain new end customers and retain and sell additional solutions to our existing base of end customers. Our ability to obtain new end customers and retain and sell additional solutions to existing customers will in turn depend in part on a number of factors. These factors include our ability to: execute on our business plans, vision, and objectives (including our growth and go-to-market strategies), respond to competitive pressures, effectively maintain existing and future customer relationships, continue to innovate by adding new functionality and improving usability of our solutions in a manner that addresses our end customers’ needs and requirements, and optimally price our solutions in light of marketplace conditions, our ability to respond to competitive pressures, manage our costs, and anticipate and manage customer demand. Furthermore, our subscription-based business model and product transitions may cause concerns among our customer base, including concerns regarding changes to pricing over time, and may also result in confusion among new and existing end customers, for example, regarding our pricing models. Such concerns and/or confusion can slow adoption and renewal rates among our current and future customer base.

Our end customers typically deploy our technology for a specific workload initially. After a new end customer's initial order, which includes the product and associated software maintenance subscriptions, support subscription and services, we focus on expanding our footprint by serving more workloads. We also generate recurring revenue from renewals, and given our subscription-focused business model, these renewals are having an increasing significance for our future revenue streams as existing subscriptions come up for renewal. We view continued purchases and upgrades as critical drivers of our success. As of July 31, 2025,2026, our net dollar-based retention rate ("NRR") was 108%,106%, compared to 114%109% as of July 31, 2024.2025. NRR is calculated as of the end of a twelve-month period. We calculate NRR by starting with the ARR for all customers with subscription contracts at the beginning of the period. We then divide end-of-the-period ARR for the same customer group by the beginning-of-the-period ARR. NRR is a performance measure that we believe provides useful information to our management and investors as it provides an indication of our ability to retain and expand ARR from our existing customer base.

We generate revenue primarily from the sale of the Nutanix Cloud Platform, sold primarily as subscription term-based licenses, and which can be deployed on a variety of qualified hardware platforms or, in the case of our cloud-based SaaS offerings, via hosted service or delivered pre-installed on a server that is configured to order. Non-portable software licenses are delivered or sold alongside configured-to-order servers and can be used over the life of the associated server.

Our subscription term-based licenses are sold separately, or can be sold alongside configured-to-order servers. Our subscription term-based licenses typically have a term of one to five years. Our cloud-based SaaS subscriptions typically have terms extending up to five years.

Our customers generally purchase their qualified hardware platforms for deployment of our software from one of our channel partners or OEMs. Our platform typically includes one or more years of support and entitlements,maintenance, which provides customers with the right to software upgrades and enhancements as well as technical support. Our platform is primarily sold through channel partners and OEMs. Revenue is recognized net of sales tax and withholding tax.

Product revenue — Product revenue primarily consists of software revenue. A majority of our product revenue is generated from the sale of the Nutanix Cloud Platform. We also sell renewals of previously purchased software licenses and SaaS offerings. RevenueWe recognize revenue from our software products isupon generally recognized uponthe transfer of control to the customer,customer. which is typically upon shipment forFor sales whenof includingour software purchased alongside a server from aan OEM or other partner, revenue is typically recognized upon makingshipment of the server. For software sold separately from a server, revenue is typically recognized when the software is made available to the customercustomer. whenFor notour soldSaaS withofferings, arevenue server,is ortypically recognized as the services are performed with SaaS offerings.performed. In the infrequent transactions where the hardware is purchased directly from Nutanix, we consider ourselves to be the principal in the transactiontransaction, and we record revenue and costs of goods sold on a gross basis.

Support, entitlementsmaintenance and other services revenue — We generate our support, entitlementsmaintenance and other services revenue primarily from software entitlementmaintenance subscriptions and support subscriptions, which include the right to software upgrades and enhancements as well as technical support. The majority of our product sales are sold in conjunction with software entitlementmaintenance subscriptions and support subscriptions, with terms typically ranging from one to five years. Occasionally, we also sell professional services with our products. We recognize revenue from software entitlementmaintenance subscriptions and support contracts ratably over the contractual service period, which typically commences upon transfer of control of the corresponding products to the customer. We recognize revenue related to professional services as they are performed.

Cost of support, entitlementsmaintenance and other services revenue — Cost of support, entitlementsmaintenance and other services revenue includes personnel and operating costs associated with our global customer support and services organization, as well as allocated costs. We expect our cost of support, entitlementsmaintenance and other services revenue to increase in absolute dollars as our support, entitlementsmaintenance and other services revenue increases.

Sales and marketing — Sales and marketing expense consists primarily of personnel costs, including sales commissions. Sales and marketing expense also includes costs for promotional activities and other marketing costs, travel expenses, costs associated with demonstration units, including depreciation, and allocated costs. Commissions are deferred and recognized as we recognize the associated revenue. We expect sales and marketing expense to continue, in the long term, to increase in absolute dollars as part of our long-term plans to invest in our growth. However, as part of our overall efforts to improve our operating cash flow performance, we have also proactively taken steps to increase our go-to-market productivity and over time, we intend to reduce our overall sales and marketing spend as a percentage of revenue. As we continue to recruitinvest additionalin sales representatives,capacity and customer-facing resources, it will take time to train and ramp thempersonnel to full productivity. As a result, our sales and marketing expense may fluctuate.

Other income (expense), net consists primarily of interest income and expense, which includes the amortization of the debt discount and debt issuance costs associated with our previously outstanding 0% convertible senior notes due 2023 (the "2023 Notes"), our previously outstanding 2.50% convertible senior notes due 2026 (the "2026 Notes"), our outstanding 0.25% convertible senior notes due 2027 (the "2027 Notes"), and our outstanding 0.50% convertible senior notes due 2029 (the "2029 Notes"), the amortization of the debt issuance costs associated with our revolving credit agreement (the "Revolver"), non-cash interest expense on the 2026 Notes, interest expense related to the conversion of the 2026 Notes in full, interest expense on the 2027 Notes andNotes, 2029 Notes, and the Revolver, inducement expense related to the partial repurchase of the 2027 Notes, changes in the fair value of convertible notes receivable, interest income related to our short-term investments, and foreign currency exchange gains or losses.

Support, entitlementsmaintenance and other services revenue increased year-over-year by approximately $115.7$167.3 million, or 11%,14%, for and fiscal 20252026 in conjunction with the growth of our end customer base, which grew approximately 10%11% during fiscal 20252026, and the related software entitlement subscriptionmaintenance and support subscription contracts and renewals.

Cost of product revenue decreased year-over-year for fiscal 20252026 due primarily to lowera stock-based compensation expense as well as decreasesdecrease in overhead resulting from lower operating lease and finance lease costs. Slight fluctuations in hardware revenue and cost of product revenue are anticipated, as we expect to continue selling small amounts of hardware for the foreseeable future.

Product gross margin increased by approximately 1.30.7 percentage points in fiscal 20252026 due primarily to product revenue increasing while cost of product revenue decreases.decreased.

Cost of support, entitlementsmaintenance and other services revenue

Cost of support, entitlementsmaintenance and other services revenue increased year-over-year for fiscal 20252026 due primarily to higher personnel-related costs, including costs for contractors, resulting from growth in our global customer support organization, as well as an increase in bonusseverance expense.expense due to the headcount reduction announced in August 2026. For additional information on the headcount reduction, refer to Note 10 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Support, entitlementsmaintenance and other services gross margin increaseddecreased by 1.00.5 percentage points in fiscal 20252026 due primarily to personnel-related costs growing at a slightly faster rate than support, entitlementsmaintenance and other services revenue growing at a higher rate than personnel-related costs.revenue.

Sales and marketing expense increased year-over-year due primarily to higher personnel-related costs, including commissions expense, resulting from the 8%3% growth in our sales and marketing headcount from July 31, 20242025 to July 31, 2025,2026, as well as increasedan marketingincrease spendin severance expense due to the headcount reduction announced in August 2026. For additional information on eventsthe andheadcount partnershipreduction, programs.refer to Note 10 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Research and development expense increased year-over-year due primarily to higher personnel-related costs, includingresulting stock-basedfrom compensationthe expense and bonus expense due to a 12%5% growth in our R&D headcount from July 31, 20242025 to July 31, 2025.2026, as well as an increase in severance expense due to the headcount reduction announced in August 2026. Research and development expense also increased due to higher depreciation expense related to propertyIT and equipmentfacilities additionscosts, duringpartially theoffset period andby an increase in outsidereimbursements servicesfor costs.technical costs related to certain partner programs. For additional information on the headcount reduction, refer to Note 10 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

General and administrative expense increased year-over-year due primarily to higher legal and outside services costs, higher personnel-related costs resulting from the 10%9% growth in our G&A headcount from July 31, 20242025 to July 31, 2025, as well as higher technical costs related to software licenses and support, partially offset by lower depreciation expense.2026.

Other Expense,Income (Expense), Net

We had a broad and diverse base of over 30,00031,000 end customers as of JanuaryApril 31,30, 2026. We define the number of end customers as the number of end customers for which we have received an order by the last day of the period, excluding partners to which we have sold products for their own demonstration purposes. A single organization or customer may represent multiple end customers for separate divisions, segments or subsidiaries, and the total number of end customers may contract due to mergers, acquisitions, or other consolidation among existing end customers.

Ratable — We recognize revenue from software maintenance subscriptions, support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software maintenance subscriptions and support subscriptions. These offerings represented approximately $286.1$279.7 million and $560.5$840.3 million of our subscription revenue for the three and sixnine months ended JanuaryApril 31,30, 2025, respectively, and $320.8$322.6 million and $628.1$950.6 million of our subscription revenue for the three and sixnine months ended JanuaryApril 31,30, 2026, respectively.

Upfront — We generally recognize revenue from our subscription software licenses upfront upon the transfer of control to the customer. For sales of our software purchased alongside a server from an OEM or other partner, revenue is typically recognized upon shipment of the server. For software sold separately from a server, revenue is typically recognized when the software is made available to the customer. These subscription software licenses represented approximately $338.3$330.0 million and $624.6$954.5 million of our subscription revenue for the three and sixnine months ended JanuaryApril 31,30, 2025, respectively, and $369.7$342.2 million and $700.3$1,042.6 million of our subscription revenue for the three and sixnine months ended JanuaryApril 31,30, 2026, respectively.

Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed. Professional services revenue was approximately $28.0 million and $55.3$83.3 million for the three and sixnine months ended JanuaryApril 31,30, 2025, respectively, and $30.4$31.7 million and $59.3$91.0 million for the three and sixnine months ended JanuaryApril 31,30, 2026, respectively.

We plan to continue to leverage our relationships with our channel and OEM partners and expand our network of cloud and ecosystem partners, all of which help to drive the adoption and sale of our solutions with our end customers. We sell our solutions primarily through our partners, and our solutions primarily run on hardware platforms that our customers often choose to purchase from our channel or OEM partners. We believe that increasing channel leverage, particularly as we expand our focus on opportunities in commercial accounts, by investing in sales enablement and co-marketing with our channel and OEM partners over the long term will extend and improve our engagement with a broad set of end customers. Our reliance on manufacturers to produce the hardware platforms on which our software typically runs exposes us to supply chain delays, which could impair our ability to providedeliver servicessolutions to end customers in a timely manner.manner, Inparticularly to the extent that current supply and pricing dynamics continue. Beginning in the latter half of the second quarter of fiscal of 2026, constraints affecting the availability of certain hardware components at manufacturers became increasingly acute,acute. extendingThese constraints have resulted in higher hardware pricing in the market and extended hardware lead times.times, Thesewhich vary across hardware vendors. Higher hardware pricing, together with extended hardware lead timestimes, have delayed,impacted, and may continue to delay,impact, customers' ability to deploy hardware and consume our software, which affects the timing of revenue recognition and cash flows from period to period.period and, in certain instances, may result in some customers delaying projects or otherwise seeking greater flexibility with licensing. Our software platform provides customers with flexibility and choice across deployment options, including hardware vendors, public cloud environments, and a growing set of external storage options, which can help enable customers to better manage how and when they deploy our solutions in periods of supply and pricing volatility. While a majority of our customer transactions involve a software‑only fulfillment motion, in a subset of transactions, customers previously purchased our software in connection with Nutanix‑branded NX‑series hardware platforms. To provide customers in these transactions with greater flexibility when facing extended hardware lead times, beginning in the third quarter of fiscal 2026, we enabled these customers to purchase our software independently of hardware delivery, thereby aligning software provisioning for these transactions with our existing software‑only fulfillment motion. This may impact the timing of revenue recognition and our ARR. Our business and results of operations will be significantly affected by our success in leveraging our relationships with our channel and OEM partners and expanding our network of cloud and ecosystem partners.

Our end customers typically deploy our technology for a specific workload initially. After a new end customer's initial order, which includes the product and associated software maintenance subscriptions, support subscription and services, we focus on expanding our footprint by serving more workloads. We also generate recurring revenue from renewals, and given our subscription-focused business model, these renewals are having an increasing significance for our future revenue streams as existing subscriptions come up for renewal. We view continued purchases and upgrades as critical drivers of our success. As of JanuaryApril 31,30, 2026, our net dollar-based retention rate ("NRR") was 107%,106%, compared to 109%110% as of JanuaryApril 31,30, 2025. NRR is calculated as of the end of a twelve-month period. We calculate NRR by starting with the ARR for all customers with subscription contracts at the beginning of the period. We then divide end-of-the-period ARR for the same customer group by the beginning-of-the-period ARR. NRR is a performance measure that we believe provides useful information to our management and investors as it provides an indication of our ability to retain and expand ARR from our existing customer base.

Provision for income taxes consists primarily of income taxes for certain foreign jurisdictions in which we conduct business and federal and state income taxes in the United States. We continue to maintain a full valuation allowance against our U.S. federal and state deferred tax assets as of JanuaryApril 31,30, 2026. We will continue to maintain a full valuation allowance on our U.S. net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of this allowance. However, given our recent history of profitable operating results and current and anticipated future earnings, we believe that if current trends persist, there is a reasonable possibility that over the next several quarters, sufficient positive evidence may become available to allow us to reach the conclusion that a significant portion of the valuation allowance will no longer be needed. The release of all, or a portion of, the valuation allowance would result in the recognition of certain deferred tax assets and a decrease in income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to significant judgment and our analysis of positive and negative factors.

Comparison of the Three and SixNine Months Ended JanuaryApril 31,30, 2025 and 2026

Product revenue increased by approximately $33.2$19.5 million, or 9%,6%, and $80.3$99.7 million, or 12%,10%, for the three and sixnine months ended JanuaryApril 31,30, 2026, respectively, as compared to the respective prior year periods, due primarily to increases in software revenue as a result of increased adoption of our products, driven by growth in software renewals and the various programs we have put in place to attract new customers onto our platform and expand with existing customers.

Support, maintenance and other services revenue increased by approximately $34.9$44.6 million, or 12%,15%, and $67.5$112.1 million, or 11%,13%, for the three and sixnine months ended JanuaryApril 31,30, 2026, respectively, as compared to the respective prior year periods, in conjunction with the growth of our end customer base, which grew approximately 11% from JanuaryApril 31,30, 2025 to JanuaryApril 31,30, 2026, and the related software maintenance and support subscription contracts and renewals.

For both the three and sixnine months ended JanuaryApril 31,30, 2025, the total average contract duration was approximately 3.0 years. For both the three and six months ended January 31, 2026, the total average contract duration was approximately 3.1 years. For the three and nine months ended April 30, 2026, the total average contract duration was approximately 3.4 years and 3.2 years, respectively. Total average contract duration represents the dollar-weighted term across all subscription contracts, as well as our limited number of life-of-device contracts billed during the period, using an assumed term of five years for licenses without a specified term, such as life-of-device licenses.

Cost of product revenue decreased for the three and sixnine months ended JanuaryApril 31,30, 2026, as compared to the respective prior year periods, due primarily to decreases in overhead resulting from lower operating lease and finance lease costs.

Product gross margin increased by approximately 1.00.4 percentage points and 1.21.0 percentage points for the three and sixnine months ended JanuaryApril 31,30, 2026, respectively, as compared to the respective prior year periods, due primarily to product revenue increasing while cost of product revenue decreased.

Cost of support, maintenance and other services revenue increased for the three and sixnine months ended JanuaryApril 31,30, 2026, as compared to the respective prior year periods, due primarily to higher personnel-related costs, resulting from growth in our global customer support organization.

Support, maintenance and other services gross margin decreasedincreased by approximately 0.4 percentage points and 0.1 percentage points for both the three and sixnine months ended JanuaryApril 31,30, 2026, respectively, as compared to the respective prior year periods, due primarily to support, maintenance and other services revenue growing at a slowerfaster rate than personnel-related costs.

Sales and marketing expense increased for the three and sixnine months ended JanuaryApril 31,30, 2026, as compared to the respective prior year periods, due primarily to higher personnel-related costs resulting from the 8%7% growth in our sales and marketing headcount from JanuaryApril 31,30, 2025 to JanuaryApril 31,30, 2026, as well as increased marketing spending on events.

Research and development expense increased for the three and sixnine months ended JanuaryApril 31,30, 2026, as compared to the respective prior year periods, due primarily to higher personnel-related costs dueresulting tofrom the 12%8% growth in our R&D headcount from JanuaryApril 31,30, 2025 to JanuaryApril 31,30, 2026, as well as an increase in IT and facilities costs.costs, partially offset by an increase in reimbursements for technical costs related to certain partner programs.

General and administrative expense increased for the three and sixnine months ended JanuaryApril 31,30, 2026, as compared to the respective prior year periods, due primarily to an increase in overhead resulting from higher operating lease and finance lease costs, higher personnel-related costs,costs resulting from the 10% growth in our G&A headcount from JanuaryApril 31,30, 2025 to JanuaryApril 31,30, 2026,2026 and higher legal and outside services costs, an increase in costs related to software licenses, as well as an increase in data center costs.

Other income (expense), net increased for the three and sixnine months ended JanuaryApril 31,30, 2026, as compared to the respective prior year periods,period, due primarily to an increase in interest income from our short-term investments which increased from approximately $1,009.9 million as of April 30, 2025 to $1,299.1 million as of April 30, 2026, as well as approximately $11.3 million of inducement expense recognized during the second quarter of fiscal 2025 related to the partial repurchase of the 2027 Notes as well as an increase in interest income from our short-term investments, which increased from approximately $670.7 million as of January 31, 2025 to $1,270.6 million as of January 31, 2026.Notes. The increase in other income (expense), net was partially offset by an increase in foreign exchange expense as well as an increase in interest expense related to our convertible notes, as the 2029 Notes were issued during the second quarter of fiscal 2025.

The decreasesincrease in the income tax provision for the three and six months ended JanuaryApril 31,30, 2026, as compared to the respective prior year periods,period, werewas due primarily to the release of certain uncertain tax positions as a result of the expiration of the statute of limitations during the fiscal quarter ended JanuaryApril 31,30, 2026,2025. partially offset byThe decrease in excessthe income tax benefitsprovision onfor stockthe optionsnine andmonths restrictedended stockApril units.30, 2026, as compared to the respective prior year period, was due primarily to the tax benefit recognized for the release of certain uncertain tax positions as a result of the expiration of the statute of limitations during the nine months ended April 30, 2026.

Our principal sources of liquidity are cash, cash equivalents and marketable securities and net accounts receivable. As of JanuaryApril 31,30, 2026, we had approximately $603.4$718.8 million of cash and cash equivalents and $1,270.6$1,299.1 million of short-term investments, which were held for general corporate purposes. Our restricted cash balance was not material. Our cash, cash equivalents and short-term investments primarily consist of bank deposits, money market accounts and highly rated debt instruments of the U.S. government and its agencies and debt instruments of highly rated corporations. As of JanuaryApril 31,30, 2026, we had accounts receivable of approximately $260.6$251.6 million, net of allowances of $2.8$3.0 million.

In February 2025, we entered into a revolving credit agreement (the "Revolver") that provides for a senior secured revolving credit facility in an aggregate principal amount of $500.0 million, including a $25.0 million sublimit for the issuance of letters of credit. The Revolver matures in February 2030, subject to earlier springing maturity under certain circumstances. As of JanuaryApril 31,30, 2026, we had no borrowings and an immaterial amount of letters of credit outstanding under the Revolver. The Revolver contains customary affirmative and negative covenants (including a financial covenant and restrictions on liens, investments, indebtedness, fundamental changes, restricted payments, transactions with affiliates, prepayments of subordinated debt and other matters, all subject to certain exceptions). The financial covenant requires us to maintain a total leverage ratio of less than or equal to 3.75:1.00, tested at the end of each fiscal quarter. As of JanuaryApril 31,30, 2026, we were in compliance with the financial covenant.

We believe that our cash, cash equivalents and short-term investments, available borrowing capacity under the Revolver, and our expected net cash provided by operating activities will be sufficient to meet our anticipated cash needs, including for working capital, capital expenditures, share repurchases (if any), the payment of taxes related to the net share settlement of equity awards, and convertible notes servicinginterest and repaymentother requirements,obligations related to convertible notes, for at least the next 12 months. Our future cash needs will depend on many factors, including our growth strategy and plans, the timing and extent of spending to support research and development and engineering efforts; the expansion of sales and marketing activities; the introduction of new and enhanced product and service offerings; the continuing market acceptance of our products; our end customers and partners; any acquisitions of businesses, technologies or products; any share repurchases; and market, economic and financial conditions (including inflation and interest rates). Holders of the 2027 Notes or the 2029 Notes will be entitled to convert their 2027 Notes or 2029 Notes under certain circumstances as described in Note 5 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. If one or more holders elect to convert their 2027 Notes or 2029 Notes, as applicable, we may elect to satisfy our conversion obligation by delivering shares of our Class A common stock or a combination of cash and shares of Class A common stock, rather than exclusively in cash. As of April 30, 2026, the conversion prices of the 2027 Notes and 2029 Notes exceed our current Class A common stock price.

As of JanuaryApril 31,30, 2026, we had non-cancelable contractual purchase obligations of $152.7$200.3 million. These purchase obligations primarily include guarantees with contract manufacturers and purchase obligations and other commitments pertaining to our daily business operations.

As of JanuaryApril 31,30, 2026, we had aggregate future minimum lease payments under non-cancelable operating leases and finance leases of $240.6$219.8 million, of which $51.4$54.6 million was short-term. Non-cancelable leases include leases that have been executed, but not yet commenced. We lease offices, research and development facilities, and data centers under operating leases expiring through JanuaryApril 20332035 and lease certain data center equipment under finance leases.

As of JanuaryApril 31,30, 2026, we had accrued liabilities related to uncertain tax positions, which are reflected on our consolidated balance sheet. These accrued liabilities are not reflected in the contractual obligations disclosed above, as it is uncertain if or when such amounts will ultimately be settled.

In August 2023, our Board of Directors authorized the repurchase of up to $350.0 million of our Class A common stock. In August 2025,2025 and April 2026, our Board of Directors approved aincreases of $350.0 million increaseand $750.0 million, respectively, to the share repurchase authorization. Repurchases will be funded from available liquidity and may be made from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act in accordance with applicable securities laws and other restrictions. The timing and amount of share repurchases will depend upon prevailing stock prices, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, and other factors. The authorization has no expiration date, may be modified, suspended or discontinued at any time, and does not obligate us to repurchase any minimum number of shares. For more information on the share repurchase, refer to Note 8 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Net cash provided by operating activities was approximately $394.2$601.7 million for the sixnine months ended JanuaryApril 31,30, 2026, compared to approximately $383.4$601.9 million for the sixnine months ended JanuaryApril 31,30, 2025. The increase inNet cash provided by operating activities remained relatively flat for the sixnine months ended JanuaryApril 31,30, 20262026, was due primarilycompared to the prior year period, as an increase in our net income fromand operations.higher cash collections were offset by increased cash outflows for prepaid expenses and accrued compensation and benefits.

Net cash used in investing activities of approximately $67.3$726.1 million for the sixnine months ended JanuaryApril 31,30, 20262025 included approximately $472.8$941.4 million of short-term investment purchases and $28.2$59.5 million of purchases of property and equipment, partially offset by approximately $431.7$272.8 million of maturities of short-term investments and $2.0 million of sales of short-term investments.

Net cash provided by financing activities of approximately $408.8$341.1 million for the sixnine months ended JanuaryApril 31,30, 2025 included approximately $848.0 million of net proceeds from the issuance of the 2029 Notes and $29.3$68.5 million of proceeds from the sale of shares through employee equity incentive plans, partially offset by approximately $220.1$257.9 million of repurchases of our Class A common stock, $148.2$212.9 million of taxes paid related to the net share settlement of equity awards, $95.5 million related to the partial repurchase of the 2027 Notes, $2.8$3.4 million of third-party debt issuance costs related to the issuance of the 2029 Notes, and $1.9$2.9 million of payments for finance lease obligations.obligations, and $2.8 million of issuance costs related to the Revolver.

Net cash used in financing activities of approximately $492.9$543.8 million for the sixnine months ended JanuaryApril 31,30, 2026 included approximately $383.1$433.2 million of repurchases of our Class A common stock and $137.0$169.4 million of taxes paid related to the net share settlement of equity awards, partially offset by approximately $29.0$61.4 million of proceeds from the sale of shares through employee equity incentive plans.