Nutanix beats the Street on revenue, lands $150M AMD AI alliance

Nutanix reported double-digit revenue growth, a sharp rise in earnings, and record customer additions for Q2 2026, alongside a $150 million strategic investment from AMD.

Revenue was up 10 percent year-on-year to $722.8 million, surpassing Nutanix's high-end $715 million guidance.

President and CEO Rajiv Ramaswami said: "Our business performed solidly in the second quarter, including strong bookings, strong new logo additions, and solid free cash flow performance. Our opportunities with AI, modern applications, hybrid multicloud, and support for external storage provide us with a strong foundation for multi-year growth."

Financial summary

• Gross margin: 87.4 percent vs year-ago 87 percent
• Operating cash flow: $197.3 million vs year-ago $221.7 million
• Free cash flow: $191.4 million vs $187.1 million last year
• ARR: $2.36 billion vs year-ago $2.1 billion, up 16 percent
• Cash, cash equivalents & restricted cash: $1.87 billion vs $2.06 billion in the last quarter
• EPS: $0.56 vs year-ago $0.09

Nutanix gained 1,050 new logos, its highest number in eight years, taking its total customer count to 30,980. CFO Rukmini Sivaraman said: "Land and expand bookings in Q2 were higher than our expectations, which we believe is partially due to customers anticipating supply-related shortages and price increases for server hardware from our partners."

Ramaswami added: "Most of the logos came from our typical VMware migrations onto [our] HCI platform."

He sees "AI as driving a whole new set of new enterprise inferencing and agentic applications for which we are in the early innings... We see this as a significant long-term growth opportunity for us... Our partnership with AMD meaningfully expands our opportunity in the enterprise AI market."

Nutanix and AMD will develop and market a Nutanix-powered agentic AI platform for enterprises and service providers built on AMD accelerated compute infrastructure, and focused on inferencing and agentic AI apps. Ramaswami said: "This equity investment from AMD makes it very much their interest to see Nutanix succeed... All our AI solutions today run on Nvidia, and now we are adding AMD to the mix to provide more choice for customers." As well as investing in Nutanix, AMD will fund up to $100 million over a multi-year period for R&D and go-to-market for the combined systems.

"The go-to-market model is that we sell our software, the full stack, which is our Nutanix Cloud Platform, our Kubernetes platform, and then our NAI, the Nutanix AI piece that runs on top of all of that."

The first Nutanix-AMD product is expected to ship in late 2026. Ramaswami said: "We expect to start seeing small amounts of revenue next calendar year... the second half of our fiscal 2027."

Turning to next quarter's outlook, Sivaraman said that, as the second quarter progressed, "we saw supply chain constraints driving longer server lead times for our customers. We expect this dynamic to have some impact on the timing of our near-term revenue and free cash flow." That means customers may face delays in getting server hardware on which to run Nutanix software. As a result of this, the company expects some revenue and free cash flow to be shifted out of this fiscal year.

Nutanix is forecasting third quarter revenues of $685 million ± $5 million and the full year outlook remains unchanged at $2.82 billion ± $20 million. Absent the worsening supply chain dynamic, Nutanix would have been in a position to raise all guided metrics for FY 2026 following its Q2 bookings performance. It sees the server supply chain problems potentially lasting a couple of years.