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What changed in Nutanix, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Nutanix, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+543 added−492 removedSource: 10-K (2025-09-24) vs 10-K (2024-09-19)

Top changes in Nutanix, Inc.'s 2025 10-K

543 paragraphs added · 492 removed · 411 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

67 edited+22 added−20 removed27 unchanged
Biggest changeNutanix AOS includes integrated snapshots, replication, and disaster recovery that can be used with block, file, and object storage and for both virtual machines and containers. • Nutanix AHV is our mature enterprise hypervisor - a modern and secure virtualization solution designed to power virtual machines and containers for application and cloud native workloads. • Nutanix Data Services for Kubernetes simplifies and unifies provisioning and operating cloud native applications by extending enterprise data services to containerized apps. • Flow Network Security is a stateful, distributed firewall providing microsegmentation to secure network traffic between applications. • Flow Virtual Networking provides rich software-defined networking with multi-tenant isolation, self-service provisioning, and IP address preservation. • Nutanix Cloud Clusters (NC2) enables organizations to run applications on a unified infrastructure platform across on-premises and multiple public clouds, all operated as a single cloud.
Biggest changeIt is a core component of NCI. • Nutanix Data Services for Kubernetes offers enterprise data services such as data protection, recovery, migration, cloning, and copy data management for containerized, modern applications on Kubernetes. • Flow Network Security is a stateful, distributed firewall providing microsegmentation to secure network traffic between applications. • Flow Virtual Networking provides software-defined networking with multi-tenant isolation, hybrid cloud networking, self-service provisioning, and IP address preservation. • Nutanix Cloud Clusters (NC2) enables organizations to run and manage applications across on-premises and multiple public clouds in a consistent manner.
NUS includes the following underlying features and services: • Nutanix Files Storage is a simple and secure software-defined scale-out file storage solution, enabling organizations to store, manage, and scale unstructured data by consolidating storage silos onto a single platform, while keeping it secure with integrated cybersecurity and ransomware protection. • Nutanix Objects Storage is a simple, scale-out S3-compatible object storage solution for modern cloud native and big data applications, offering intuitive operations, high performance, security, and flexibility for multicloud deployments. • Nutanix Volumes Block Storage is an enterprise-class, software-defined storage solution that exposes storage resources directly to virtualized guest operating systems or physical hosts using the iSCSI protocol. • Nutanix Data Lens is a cloud-based cyber resilience service offering proactive defense and a global view of analytics for file and object environments that can identify and inform users of malware attacks, such as ransomware, on the NUS platform.
NUS includes the following underlying features and services: • Nutanix Files Storage is a software-defined scale-out file storage solution, enabling organizations to store, manage, and scale unstructured data by consolidating storage silos onto a single platform, while keeping it secure with integrated cybersecurity and ransomware protection. • Nutanix Objects Storage is a scale-out S3-compatible object storage solution for modern cloud native and big data applications, offering intuitive operations, high performance, security, and flexibility for multicloud deployments. • Nutanix Volumes Block Storage is an enterprise-class, software-defined storage solution that exposes storage resources directly to virtualized guest operating systems or physical hosts using the iSCSI protocol. • Nutanix Data Lens is a cloud-based cyber resilience service offering proactive defense and a global view of analytics for file and object environments that can identify and inform users of malware attacks, such as ransomware, on the NUS platform.
Further corporate governance information, including our corporate governance guidelines, board committee charters and code of business conduct and ethics, is also available on our investor relations website under the heading "Governance Documents." Information contained on or accessible through our websites is neither a part of nor incorporated by reference into this Annual Report on Form 10-K or any other report or document we file with or furnish to the SEC, and any references to our websites and the inclusion of our website addresses in this Annual Report on Form 10-K are intended to be inactive textual references only. 10 Table of Contents
Further corporate governance information, including our corporate governance guidelines, board committee charters and code of business conduct and ethics, is also available on our investor relations website under the heading "Governance Documents." Information contained on or accessible through our websites is neither a part of nor incorporated by reference into this Annual Report on Form 10-K or any other report or document we file with or furnish to the SEC, and any references to our websites and the inclusion of our website addresses in this Annual Report on Form 10-K are intended to be inactive textual references only. 11 Table of Contents
Powered by rich data services such as analytics, ransomware protection, lifecycle management, and data protection, NUS enables organizations to adapt to fast-changing applications' needs and shift their management focus from data storage to more strategic global data management.
Powered by data services such as analytics, ransomware protection, lifecycle management, and data protection, NUS enables organizations to adapt to fast-changing applications' needs and shift their management focus from data storage to more strategic global data management.
This Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are made available free of charge on the investor relations portion of our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
This Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as amended, are made available free of charge on the investor relations portion of our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We originally pioneered hyperconverged infrastructure ("HCI") to break down legacy silos by merging compute, storage and networking into a single, easy-to-use, software-defined data center platform. We continued to innovate and developed Nutanix AHV, our native hypervisor that offers enterprise-grade virtualization and built-in Kubernetes support.
We originally pioneered hyperconverged infrastructure ("HCI") to break down legacy silos by merging compute, storage and networking into a single software-defined data center platform. We continued to innovate and developed Nutanix AHV, our native hypervisor that offers enterprise-grade virtualization and built-in Kubernetes support.
We have never had a work stoppage and we consider our relationship with our employees to be good. We understand the importance of human capital and prioritize building our culture, talent development, compensation and benefits, and diversity and inclusion.
We have never had a work stoppage and we consider our relationship with our employees to be good. We understand the importance of human capital and prioritize building our culture, talent development, and compensation and benefits.
Supermicro designs, assembles and tests the Nutanix-branded NX series appliances and it procures the components used in the NX series appliances directly from third-party suppliers. Our agreement with Supermicro automatically renews annually in May for successive one-year periods thereafter, with the option to terminate upon each annual renewal.
Supermicro designs, assembles and tests the Nutanix-branded NX series hardware platforms and it procures the components used in the NX series hardware platforms directly from third-party suppliers. Our agreement with Supermicro automatically renews annually in May for successive one-year periods thereafter, with the option to terminate upon each annual renewal.
These adjacent markets include areas such as Kubernetes management and data and platform services, cloud disaster recovery, data governance and compliance, cloud management, files and object storage, and database automation and database-as-a-service.
These adjacent markets include areas such as Kubernetes management and data and platform services, AI platform services, cloud disaster recovery, data security, governance and compliance, cloud management, files and object storage, and database automation and database-as-a-service.
See Item 1A, "Risk Factors," for further discussion of risks related to the potential impact of government regulation on our business. Employees and Human Capital We had approximately 7,150 employees worldwide as of July 31, 2024. None of our employees in the United States are represented by a labor organization or are a party to any collective bargaining arrangement.
See Item 1A, "Risk Factors," for further discussion of risks related to the potential impact of government regulation on our business. Employees and Human Capital We had approximately 7,800 employees worldwide as of July 31, 2025. None of our employees in the United States are represented by a labor organization or are a party to any collective bargaining arrangement.
We intend to continue investing in our vision to make Nutanix Cloud Platform the platform of choice to run applications and data anywhere. We believe our platform can enable customers to accelerate their strategic initiatives to modernize legacy lT infrastructure, modernize applications, and accelerate the deployment of enterprise AI. • Deepening engagement with channel, OEM, cloud, and ecosystem partners.
We intend to continue investing in our vision to make the Nutanix Cloud Platform the platform of choice to run applications and manage data, anywhere. We believe our platform can enable customers to accelerate their strategic initiatives to modernize legacy lT infrastructure and deploy modern applications and enterprise AI. • Deepening engagement with channel, OEM, cloud, and ecosystem partners.
Our Support Programs Product Support. We offer varying levels of software support to our customers based on their needs. We also offer hardware support for customers who purchase the Nutanix-branded NX configured-to-order hardware appliances. Professional Services. We provide consulting and implementation services to customers through our professional services team for assessment, design, deployment, and optimizing of their Nutanix environments.
We offer varying levels of software support to our customers based on their needs. We also offer hardware support for customers who purchase the Nutanix-branded NX configured-to-order hardware platforms. Professional Services. We provide consulting and implementation services to customers through our professional services team for assessment, design, deployment, and optimizing of their Nutanix environments.
Nutanix Cloud Platform supports a wide variety of workloads with varied compute, storage, and network requirements, including business-critical applications, data platforms (including SQL and NoSQL databases and business intelligence applications), general-purpose workloads (including system infrastructure, networking, and security), end-user computing and virtual desktop infrastructure services, enterprise artificial intelligence ("AI") workloads (including machine learning ("ML") and generative AI workloads), and cloud native applications (including modern, containerized applications).
The Nutanix Cloud Platform supports a wide variety of workloads with varied compute, storage, and network requirements, including business-critical applications, data platforms (including SQL, NoSQL, and vector databases and business intelligence applications), 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).
Nevertheless, compliance with existing or future governmental regulations, including, but not limited to, those pertaining to global trade, acquisitions, data protection and data privacy, employment and labor, and taxes could have a material impact on our business in subsequent periods.
Nevertheless, compliance with existing or future governmental regulations, including, but not limited to, those pertaining to global trade, acquisitions, AI-related governance, data protection and data privacy, climate, employment and labor, and taxes could have a material impact on our business in subsequent periods.
In addition to making hybrid multicloud deployments simple, we have a further long-term vision to enable developers to build modern container-based applications once and run them anywhere through Project Beacon, our multi-year effort to provide consistent Kubernetes platform management and data-centric platform services across clouds. Our business is organized into a single operating and reportable segment.
In addition to enabling enterprise AI and simplifying hybrid multicloud deployments, we have a further long-term vision to enable developers to build modern container-based applications once and run them anywhere through Project Beacon, our multi-year effort to provide consistent Kubernetes platform management and data-centric platform services across clouds. Our business is organized into a single operating and reportable segment.
We are also venturing into a number of markets that are adjacent to our core HCI market, both through the expansion in hybrid multicloud environments as well as through our addition of new functionality and features in our platform and through portfolio products.
We have also strategically expanded into a number of markets that are adjacent to our core HCI market, both through the expansion in hybrid multicloud environments as well as through our addition of new functionality and features in our platform and through portfolio products.
We believe that our facilities are adequate to meet our needs for the immediate future and that, should it be needed, we would lease suitable additional space to accommodate our operations. Government Regulation Our business activities are subject to various federal, state, local, and foreign laws, rules and regulations.
We believe that our facilities are adequate to meet our needs for the immediate future and that, should it be needed, we would be able to lease suitable additional space to accommodate our operations. 8 Table of Contents Government Regulation Our business activities are subject to various federal, state, local, and foreign laws, rules and regulations.
Competitors in these markets include large, sophisticated companies that may have more experience or longer operating histories in these markets as well as new entrants. 7 Table of Contents We believe that we are positioned favorably against our competitors based on these factors.
Competitors in these markets include large, sophisticated companies that may have more experience or longer operating histories in these markets as well as new entrants. We believe that we are positioned favorably against our competitors based on these factors.
We engage buyers through a variety of outbound and inbound marketing programs that include email, digital marketing, corporate and third-party events that generate customer and prospect awareness - including our annual user event, .NEXT, in-person and virtual demand generation activities, social media outreach, media and analyst relations activities, learning certifications, community programs, platform test drives, thought leadership, and our website.
We seek to create and capture buyer demand through a variety of outbound and inbound marketing programs that include email, digital marketing, corporate and third-party events that generate customer and prospect awareness - including our annual user event, .NEXT, in-person and virtual demand generation activities, social media outreach, media and analyst relations activities, learning certifications, community programs, platform test drives, thought leadership, and our website.
In addition, we work closely with our technology partners through co-marketing and lead generation activities in an effort to broaden our marketing reach and help us win new customers while retaining existing ones. Cloud Partners . Our partnerships with public cloud providers help us to realize our vision of a hybrid multicloud.
In addition, we work closely with our technology partners through co-marketing and lead generation activities in an effort to broaden our marketing reach and help us win new customers while retaining existing ones. 4 Table of Contents Cloud Partners . Our partnerships with leading public cloud providers support our vision of a hybrid multicloud.
Nutanix Cloud Platform’s scale-out architecture, enterprise-grade data services and freedom of infrastructure choice enable organizations to standardize on Nutanix Cloud Platform as a single cloud platform to run a wide variety of workloads. 1 Table of Contents Nutanix Cloud Infrastructure (NCI) is a distributed HCI for enterprise IT applications.
The Nutanix Cloud Platform’s scale-out architecture, common operating model across locations, enterprise-grade data services and freedom of infrastructure choice enable organizations to standardize on the Nutanix Cloud Platform as a single cloud platform to run a wide variety of workloads. 1 Table of Contents Nutanix Cloud Infrastructure (NCI) is a distributed HCI for enterprise IT applications.
Through our unified Elevate Partner Program, we offer qualified partners access to market development funds, co-branded marketing campaigns, joint demand programs, and comprehensive learning paths. Research and Development Our research and development efforts are focused primarily on improving current technology, developing new technologies in current and adjacent markets, and supporting existing end customer deployments.
Through our unified Elevate Partner Program, we offer qualified partners access to market development funds, co-branded marketing campaigns, joint demand programs, and comprehensive learning paths. 6 Table of Contents Research and Development Our research and development efforts are focused primarily on enhancing our existing technologies, developing new technologies in current and adjacent markets, and supporting existing end customer deployments.
Nutanix Cloud Platform Nutanix Cloud Platform delivers a rich set of software products, solutions and services to enable our customers to simply run and manage their private cloud, public and managed cloud and hybrid multicloud environments.
The Nutanix Cloud Platform The Nutanix Cloud Platform delivers a set of software products, solutions and services to enable our customers to run and manage their private cloud, edge, public cloud, managed cloud, and hybrid multicloud environments.
We rely on patents, trademarks, copyrights and trade secret laws, confidentiality procedures, and employee nondisclosure and invention assignment agreements to protect our intellectual property rights. As of July 31, 2024, we had 513 U.S. patents that have been issued and 168 non-provisional patent applications pending in the United States. Our issued U.S. patents expire between 2033 and 2044.
We rely on patents, trademarks, copyrights and trade secret laws, confidentiality procedures, and employee nondisclosure and invention assignment agreements to protect our intellectual property rights. As of July 31, 2025, we had 578 U.S. patents that have been issued and 159 non-provisional patent applications pending in the United States. Our issued U.S. patents expire between 2033 and 2045.
NCI includes the following underlying features and services: • Nutanix AOS is the scale-out storage technology that makes HCI possible, delivering enterprise-grade capabilities via a highly distributed software architecture that runs across clusters of servers.
NCI includes the following underlying features and services: • Nutanix AOS is the scale-out storage technology that makes HCI possible, delivering enterprise-grade capabilities via a highly distributed software architecture that runs on commodity x86 servers.
We also have ongoing collaborations with Dell to develop a new solution involving the integration of our platform and Dell PowerFlex (which will be the first external storage supported and integrated with Nutanix AHV and our platform) as well as with Cisco to certify Cisco UCS blade servers to enable organizations to repurpose existing deployed servers that are qualified to run Nutanix AHV.
We have also developed a new solution with Dell involving the integration of the Nutanix Cloud Platform and Dell PowerFlex (which is the first external storage supported and integrated with Nutanix AHV and our platform) as well as with Cisco to certify Cisco UCS blade servers to enable organizations to repurpose existing deployed servers that are qualified to run Nutanix AHV.
Our research and development teams primarily consist of distributed systems software and user interface engineers. A large portion of our research and development team is based in San Jose, California. We also maintain research and development centers in India, North Carolina, Washington, Serbia, Germany, and the United Kingdom.
Our research and development teams include distributed systems software engineers, platform engineers, systems engineers, user interface engineers and user experience designers. A large portion of our research and development team is based in San Jose, California and India. We also maintain research and development centers in North Carolina, Serbia, Washington, Germany, Mexico, and the United Kingdom.
We believe that these investments will contribute to our long-term growth, although they may adversely affect our profitability in the near term. Manufacturing We do not manufacture any hardware. The Nutanix-branded NX series appliances are manufactured by Super Micro Computer, Inc. ("Supermicro").
We believe that these investments will support our long-term growth strategy, although they may result in increased expenses and adversely affect our profitability in the near term. Manufacturing We do not manufacture any hardware. The Nutanix-branded NX series hardware platforms are manufactured by Super Micro Computer, Inc. ("Supermicro").
Purchases of non-portable software are typically accompanied by the purchase of separate support and entitlements. 3 Table of Contents Our Partners We have established relationships with our channel, OEM, ecosystem and cloud partners, all of which help to drive the sale and adoption of our solutions with our end customers.
Purchases of non-portable software are typically accompanied by the purchase of separate support and entitlements. Our Partners We have established relationships with our channel, OEM, ecosystem and cloud partners, all of which help to drive the sale and adoption of our solutions with our end customers. Our solutions can be purchased through one of our channel partners or OEMs.
Information contained on or accessible through our website is neither a part of this Annual Report on Form 10-K nor incorporated by reference herein, and any references to our website and the inclusion of our website address in this Annual Report on Form 10-K are intended to be inactive textual references only.
Information contained on or accessible through our website is neither a part of this Annual Report on Form 10-K nor incorporated by reference herein, and any references to our website and the inclusion of our website address in this Annual Report on Form 10-K are intended to be inactive textual references only. 10 Table of Contents Available Information Our website is located at www.nutanix.com and our investors relations website is located at ir.nutanix.com.
NC2 empowers IT operators to place workloads in their clouds of choice without migration or operational hurdles, delivering flexibility and freedom from cloud lock-in. • Nutanix Central unifies the control of Nutanix's hybrid multicloud infrastructure, providing global visibility and simplified governance through a single console with federated access and seamless navigation across on-premises deployments and public cloud deployments via NC2. • Nutanix Prism is the unified control plane and UI that provides intuitive, consumer-grade management for end-to-end IT infrastructure management and operations.
NC2 empowers IT operators to place workloads in their clouds of choice with ease of deployment and migration, delivering flexibility and portability across public clouds. • Nutanix Central provides management of the Nutanix hybrid multicloud environment, providing global visibility and simplified governance through a single console with federated access and seamless navigation across on-premises and public cloud deployments. • Nutanix Prism is the unified control plane and UI that provides centralized management for end-to-end IT infrastructure management and operations.
We have also developed and announced strategic technology partnerships that bring together best-in-class solutions across the ecosystem into integrated offerings and demonstrated interoperability and support for our customers, including partnerships with Citrix Systems, Inc., Intel Corporation, NVIDIA, and Red Hat, Inc.
We have also developed and announced strategic technology partnerships that bring together best-in-class solutions across the ecosystem into integrated offerings and demonstrated interoperability and support for our customers, including partnerships with Advanced Micro Devices, Inc., Citrix Systems, Inc., Intel Corporation, Nvidia Corporation, Omnissa, LLC, Palo Alto Networks, Inc., and Pure Storage, Inc.
Our Nutanix Cloud Platform is designed to enable organizations to build a hybrid multicloud infrastructure, providing a consistent cloud operating model with a single platform for running applications and managing data in core data centers, at the edge, and in public clouds, all while supporting a variety of hypervisors and container platforms.
The Nutanix Cloud Platform is designed to enable organizations to build hybrid multicloud infrastructure, providing a consistent cloud operating model with a single platform for running applications and managing data in core data centers, at the edge, and in public clouds, while supporting customer choice across server platforms, storage options, public and managed clouds, and container and virtualization platforms.
Our human capital resources objectives include identifying, recruiting, retaining, and incentivizing talent, as well as promoting the development and integration of our existing and new employees, advisors and consultants.
Our human capital resources objectives include attracting, retaining, and rewarding talent, as well as promoting the development and integration of our existing and new employees.
Available Information Our website is located at www.nutanix.com and our investors relations website is located at ir.nutanix.com. We file reports with the Securities and Exchange Commission ("SEC"), which maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers, including us, that file electronically with the SEC.
We file reports with the Securities and Exchange Commission ("SEC"), which maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers, including us, that file electronically with the SEC.
These markets are characterized by constant change and rapid innovation.
These markets are characterized by constant change, rapid innovation, and evolving licensing and consumption models.
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.
We had a broad and diverse base of over 29,000 end customers as of July 31, 2025. 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.
Delivery of Our Solutions Nutanix Cloud Platform can be deployed in core data centers, at the edge, or in public clouds, running on a variety of qualified hardware platforms (including our Nutanix-branded NX hardware line), in popular public cloud environments such as Amazon Web Services ("AWS") and Microsoft Azure ("Azure") through NC2, or, in the case of our cloud-based software and software-as-a-service ("SaaS") offerings, via hosted service.
GPT-in-a-Box also includes a comprehensive set of services to facilitate deployment. 3 Table of Contents Delivery of Our Solutions The Nutanix Cloud Platform can be deployed in core data centers, at the edge, or in public or managed clouds, running on a variety of qualified hardware platforms, in popular public cloud environments such as Amazon Web Services ("AWS"), Microsoft Azure ("Azure") and Google Cloud (currently in public preview and expected to become generally available in the future) through NC2, or, in the case of our cloud-based software and software-as-a-service ("SaaS") offerings, via hosted service.
We face competition from, among others: • software providers that offer a broad range of virtualization, infrastructure and management products to build and operate enterprise and hybrid clouds, such as VMware by Broadcom; • providers of public cloud infrastructure and SaaS-based offerings, such as AWS, Google Cloud, Oracle Cloud, and Azure; and • traditional IT systems vendors, such as Dell, HPE, Hitachi Data Systems ("Hitachi"), International Business Machines ("IBM"), Lenovo, Pure Storage, Inc.
We face competition from a broad range of providers, including, among others: • software providers that offer virtualization, containerization, infrastructure and management products to build and operate enterprise and hybrid clouds, such as VMware by Broadcom, Microsoft, and Red Hat; • providers of public cloud infrastructure and SaaS-based offerings, such as AWS, Google Cloud, Oracle Cloud, and Azure; and • traditional IT systems vendors, such as Dell, Fujitsu, HPE, Hitachi Vantara, Lenovo, Pure Storage, Inc., NetApp, Inc., and Huawei Technologies Co., Ltd., many of which offer integrated systems that bundle servers, storage and networking solutions, as well as standalone server and storage products.
Some of our competitors may also expand their product offerings, acquire competing businesses, sell at lower prices, bundle with other products and capabilities (including artificial intelligence, machine learning, and generative AI capabilities), provide closed technology platforms, partner with other companies to develop joint solutions, or otherwise attempt to gain a competitive advantage.
Some of our competitors may also expand their product and service offerings, acquire or invest in competing businesses or emerging technologies, offer differentiated pricing terms, bundle their products with other products and capabilities (including 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.
We believe this land-and-expand strategy will help enable us to expand our footprint within our existing customer base. • Driving renewals and retention in existing end customers. In addition to our land-and-expand strategy, as part of our subscription-based business model, we intend to continue to focus on adoption and renewals among our existing customer base.
In addition to our land-and-expand strategy, as part of our subscription-based business model, we intend to continue to focus on adoption and renewals among our existing customer base. Our focus on adoption drives customer value and stickiness.
("Cisco"), Dell Technologies ("Dell"), Fujitsu Technology Solutions GmbH ("Fujitsu"), Hewlett Packard Enterprise ("HPE"), and Lenovo Group Ltd. ("Lenovo"), as part of the Cisco Compute Hyperconverged with Nutanix family, Dell XC series (including the recently announced Dell XC Plus), Fujitsu XF series, HPE DX series appliances, and Lenovo Converged HX series, respectively.
("Cisco"), Dell Technologies ("Dell"), Fujitsu Technology Solutions GmbH ("Fujitsu"), Hewlett Packard Enterprise ("HPE"), and Lenovo Group Ltd. ("Lenovo"), as part of Cisco Compute Hyperconverged with Nutanix, Dell XC, Fujitsu XF, HPE DX, and Lenovo Converged HX, respectively. HPE also delivers our software with HPE DX servers as a service through the HPE GreenLake offering.
We believe the principal competitive factors in our market include: • platform features and capabilities; • system scalability, performance and resiliency; • management and operations, including provisioning, troubleshooting, analytics, automation, and upgrades; • total cost of ownership over the lifetime of the technology; • customer freedom of choice over, and product interoperability with, third-party applications, infrastructure software, infrastructure systems, and platforms and public clouds; • application mobility across disparate silos of enterprise computing, including public and private cloud infrastructure; and • quality of customer experience, including ease-of-use, support and professional services.
Additionally, as companies increasingly offer competing solutions, they may be less willing to cooperate with us as an OEM or otherwise. 7 Table of Contents We believe the principal competitive factors in our market include: • platform features and capabilities; • system scalability, performance and resiliency; • the ecosystem of certified applications, services, and solutions for our platform; • management and operations, including provisioning, troubleshooting, analytics, automation, and upgrades; • total cost of ownership over the lifetime of the technology; • customer freedom of choice over, and product interoperability with, third-party applications, infrastructure software, infrastructure systems, and platforms and public clouds; • the ability to compete with incumbent vendors whose deeply integrated solutions and long-term commercial arrangements may limit customer flexibility and increase switching costs; • application mobility across disparate silos of enterprise computing, including public and private cloud infrastructure; and • quality of customer experience, including ease-of-use, support and professional services.
NCM includes the following underlying features and services: • NCM Intelligent Operations optimizes capacity, proactively detects performance anomalies, and automates operational tasks with ease and confidence. • NCM Self-Service and Orchestration streamlines how teams manage, deploy, and scale applications across hybrid clouds with self-service, automation, and centralized role-based governance. • NCM Cost Governance drives financial accountability with intelligent resource sizing and accurate visibility into cloud metering and chargeback. • Nutanix Security Central is a software-as-a-service-based security dashboard that unifies cloud security operations to help organizations simplify security planning and microsegmentation policy definitions. 2 Table of Contents Nutanix Unified Storage (NUS) is a software-defined data services platform that uniquely consolidates access and management of siloed block, file, and object storage into a single platform.
NCM includes the following underlying features and services: • NCM Intelligent Operations optimizes capacity, proactively detects performance anomalies, and automates operational tasks. • NCM Self-Service and Orchestration streamlines how teams manage, deploy, and scale applications across hybrid clouds with self-service, automation, and centralized role-based governance. • NCM Cost Governance drives financial accountability with intelligent resource sizing and accurate visibility into multicloud metering and chargeback. • Nutanix Security Central unifies cloud security operations to help organizations simplify security planning, define microsegmentation policies, and enforce regulatory compliance for zero trust. 2 Table of Contents Nutanix Kubernetes Platform (NKP) is an enterprise-grade Kubernetes platform that enables organizations to accelerate app development without lock-in.
We also continue to support the well-being and continued development of our employees by offering well-being days, during which all employees may enjoy private time away from work requirements.
We also continue to support the well-being and continued development of our employees by offering well-being days, during which all employees may enjoy private time away from work requirements. Growth and Development We challenge our employees to constantly learn, continuously improve and evolve -- and to that end we invest in resources to foster a learning culture throughout our company.
We have established strong partnerships, and driven commercial success with several major channel, OEM, cloud, and ecosystem partners. We intend to continue to attract and engage new channel and OEM partners around the globe while also selling our software for deployment on qualified hardware or hosted services.
We have established strong partnerships, and driven commercial success with several major channel, OEM, cloud, and ecosystem partners. We intend to continue to deepen relationships with existing channel and OEM partners and expand our partner ecosystem globally, while also supporting deployment of our software on qualified hardware and hosted services. • Driving profitable growth.
We plan to dedicate significant resources to our continued research and development efforts and intend to continue to grow our global research and development and engineering teams to enhance our solutions, improve integration with new and existing ecosystem partners and broaden the range of IT infrastructure technologies that we converge into our platform.
We plan to dedicate significant resources to our continued research and development efforts and intend to continue to invest 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.
Our focus on adoption drives customer value and stickiness, and our renewals are associated with lower sales costs, as compared to landing new end customers or expanding sales to existing end customers. • Building on our hybrid multicloud vision.
Our renewals are associated with lower sales costs as compared to landing new customers or expanding into our existing customer base, and help us drive profitable growth. 5 Table of Contents • Building on our hybrid multicloud vision.
Nutanix Database Service (NDB) is a comprehensive solution for managing diverse database environments and delivering database-as-a-service functionality across on-premises and public cloud environments. NDB automates database lifecycle management and integrates with cloud native development processes. Nutanix Kubernetes Platform (NKP) creates a consolidated orchestration and management environment for large-scale Kubernetes environments and simplifies Kubernetes management and deployment across different development environments.
Nutanix Database Service (NDB) is a platform that automates management of diverse database environments with a database-as-a-service platform functionality across on-premises and public cloud environments. NDB automates database lifecycle management and integrates with cloud native development processes.
We typically provide these services at the time of initial installation to help the customer with configuration and implementation. 4 Table of Contents Our End Customers We have end customers across a broad range of industries, such as automotive and other transportation, consumer goods, education, energy, financial services, healthcare, manufacturing, media, public sector, retail, technology, and telecommunications.
Our End Customers We have end customers across a broad range of industries, such as financial services, retail, manufacturing, public sector, automotive and other transportation, consumer goods, education, energy, healthcare, media, technology, and telecommunications. We also sell to service providers, which also use the Nutanix Cloud Platform to provide a variety of cloud-based services to their customers.
We intend to continue to grow our customer footprint through targeted investments in sales and marketing, our network of channel partners, and strengthening our OEM partnerships. We believe that our evolving platform and product portfolio will help enable us to address a larger customer base. • Expanding sales to existing end customers.
We intend to continue to grow our customer footprint through targeted investments in sales and marketing, our network of channel partners, and strengthening our OEM partnerships.
Purchases of term-based licenses and SaaS subscriptions have support and entitlements included within the subscription fees and are not sold separately.
The Nutanix Cloud Platform typically includes support and entitlements, which provides customers with the right to software upgrades and enhancements as well as technical support. Purchases of term-based licenses and SaaS subscriptions have support and entitlements included within the subscription fees and are not sold separately.
Our solutions can be purchased through one of our channel partners or OEMs. Channel Partners . Our channel partners sell our solutions to end customers, and in certain cases, may also deliver our solutions to end customers through a managed or integrated offering.
Channel Partners . Our channel partners sell our solutions to end customers, and in certain cases, may also deliver our solutions to end customers through a managed or integrated offering. Our Elevate Partner Program simplifies engagement for our partner ecosystem using a consistent set of tools, resources, and marketing platforms.
ITEM 1. Business Overview Nutanix, Inc. ("we," "us," "our," or "Nutanix") is a global leader in cloud software, offering organizations a single platform for running applications and managing data, anywhere. Our vision is to make hybrid multicloud deployments simple and free customers to focus on achieving their business outcomes.
ITEM 1. Business Overview Nutanix, Inc. ("we," "us," "our," or "Nutanix") is a hybrid multicloud computing leader, offering organizations a unified software platform for running applications and AI and managing data anywhere. Our vision is to simplify the deployment and operation of the increasingly distributed landscape of apps and data while freeing organizations to focus on business goals.
Our Elevate Partner Program simplifies engagement for our partner ecosystem using a consistent set of tools, resources, and marketing platforms. Our channel partners include distributors, resellers, managed service providers, telcos, and global systems integrators. Our top two distributors to our end customers represented 48%, 48% and 47% of our total revenue for fiscal 2022, 2023 and 2024, respectively.
Our channel partners include distributors, resellers, managed service providers, telcos, and global systems integrators. Our top two distributors to our end customers represented 48%, 47% and 41% of our total revenue for fiscal 2023, 2024 and 2025, respectively. OEM Partners . Our software can run on qualified hardware from Cisco Systems, Inc.
Key drivers of profitable growth include a growing renewals base, leverage from our partners and alliances, and a continued focus on improving sales, marketing, and research and development efficiencies. 5 Table of Contents Sales and Marketing Sales .
Key drivers of profitable growth include landing new customers, a growing base of renewals, expansions with existing customers, leveraging our partner and alliance ecosystem, and a continued focus on improving operational efficiencies across sales, marketing, and research and development. Sales and Marketing Sales .
The breadth of our product portfolio allows us to engage multiple buyer and user personas across the organization, including senior executives, IT professionals, and developers.
The breadth of our product portfolio allows us to engage multiple buyer and user personas across the organization, including senior executives, IT professionals, and developers. Over the past year, we have focused on driving market awareness of our virtualization, cloud native, and enterprise AI-ready capabilities amid ongoing industry disruption.
Health, Wellness, and Safety The health and safety of employees and others on our property are a top priority. We also focus on compliance with all health and safety laws applicable to our business. To that end, appropriate requirements are implemented, as needed, in order to comply with public health or safety obligations.
To that end, appropriate requirements are implemented, as needed, in order to comply with public health or safety obligations. We have a physical security policy applicable to all our employees with a global physical security team that is empowered to protect the safety of our employees in the event of emergencies or disasters.
We also intend to continue to expand our partnerships with OEM, cloud, and ecosystem partners to provide our customers with more freedom of choice. • Driving profitable growth. We intend to continue to invest in our growth, while balancing such growth against our operating expenses. By maintaining this balance, we believe we will be able to sustain profitable growth.
We intend to continue to invest in our growth, while balancing such growth against our operating expenses. By maintaining this balance, we believe we can sustain profitable growth.
Our learning programs include digital learning, speed coaching, customized learning workshops, management enablement and skills training for current, new and future managers, training on diversity, inclusion, and belonging, language learning programs, and employee wellness programs.
We empower our employees to drive their own personal and professional growth by equipping them with onboarding and learning programs. Our learning programs include digital learning, speed coaching, customized learning workshops, manager enablement and skills training for current, new and future managers, training on culture, language learning programs, and employee wellness programs.
Distributors handle fulfillment and shipment for certain end customers, but do not hold inventory. 6 Table of Contents Competition We operate in the intensely competitive IT infrastructure market and compete primarily with companies that sell software and hardware to build and operate private clouds, integrated systems and standalone storage and servers, as well as providers of public cloud infrastructure solutions.
Competition We operate in the intensely competitive cloud infrastructure and platform services markets and compete with a broad range of companies that sell software and hardware to build and operate private clouds, integrated systems and standalone storage and servers, as well as cloud services providers and managed service providers.
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.
Furthermore, as we expand our product offerings, we may expand into new markets, and we may encounter additional competitors in such markets.
We regularly review our programs and encourage employee feedback about the rewards they value most. We tailor rewards programs specifically based on local market practice and the competitive landscape and we provide a range of globally available support programs such as an Employee Assistance Program, online health engagement, and child development support.
Our comprehensive reward programs offer physical, mental/emotional, and financial support to our employees and their families. We regularly review our programs and encourage employee feedback about the rewards they value most. We tailor rewards programs specifically based on local market practice and the competitive landscape.
Our subscription term-based licenses are sold separately or can also be sold alongside configured-to-order appliances. Our subscription term-based licenses typically have durations ranging from one to five years. Our cloud-based SaaS subscriptions have durations extending up to five years.
Our subscription term-based licenses are sold separately and typically have durations ranging from one to five years. Our cloud-based SaaS subscriptions have durations 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 original equipment manufacturers ("OEMs").
The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through stock-based and cash-based compensation awards to drive stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives. 8 Table of Contents Diversity, Equity, Inclusion and Belonging At Nutanix, we believe that our differences make us stronger: our diverse backgrounds, experiences and perspectives when shared, make us a more innovative and resilient team, and we can better delight and serve our customers when our teams reflect the diversity of the businesses and communities we serve.
The principal objectives of our equity and cash incentive plans are to attract, retain and reward personnel through stock-based and cash-based compensation awards, to drive stockholder value and the success of our company by motivating such individuals to align their work to company goals, and to perform to the best of their abilities and to achieve our objectives.
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.
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.
To provide our customers with more choice, we further engineered our software solutions to run on a variety of server platforms, decoupling our software from Nutanix-branded hardware appliances and powering a variety of on-premises private cloud deployments, as part of our previously-completed transition from a hardware company to a software company.
To provide our customers with more choice, we further engineered our software solutions to run on a variety of server platforms and with a variety of external storage providers. Most recently, we have extended our software platform support to include external storage from qualified partners.
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Our mission is to delight customers with an open hybrid multicloud platform with rich data services to run and manage any application, anywhere.
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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.
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NKP is designed to address the needs of platform engineering teams by enabling them to simply deploy, secure, manage, and upgrade Cloud Native Computing Foundation compliant Kubernetes environments supporting production applications in core data centers, at the edge, or natively in public clouds.
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Nutanix AOS includes integrated snapshots, replication, and disaster recovery that can be used with block, file, and object storage and for both virtual machines and containers.
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GPT-in-a-Box is a turnkey AI solution for organizations wanting to implement generative AI applications in the enterprise while maintaining control of their private data and applications.
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AOS can be run on virtual machines such as AHV and in containers such as AWS EKS, enabling customers to leverage AOS storage for both virtualized and containerized applications. • Nutanix AHV is our enterprise hypervisor—a modern and secure virtualization solution designed to power virtual machines and containers for application and cloud native workloads.
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GPT-in-a-Box simplifies the deployment of AI applications with pre-certified GPU-enabled hardware from our hardware ecosystem, a full user interface, and integration with NVIDIA and an expanding AI partner ecosystem to support a choice of large language models.
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NKP brings resiliency, security, and Day 2 operations to cloud native applications through a complete, open, and enterprise-grade Kubernetes platform. NKP accelerates app delivery with an intelligent platform that standardizes management for fleets of clusters across public clouds, data centers, and the edge.
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Our customers generally purchase their qualified hardware platforms for deployment of our software from one of our channel partners or original equipment manufacturers ("OEMs"). Nutanix Cloud Platform typically includes one or more years of support and entitlements, which provides customers with the right to software upgrades and enhancements as well as technical support.
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Nutanix Unified Storage (NUS) is a software-defined data services platform that consolidates access and management of siloed block, file, and object storage into a single platform.
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OEM Partners . Our OEM partners typically pre-install our software on hardware appliances and sell to end customers as an appliance. Our OEM partners can also sell our offerings as software-only to our end customers. Our software is installed on hardware from Cisco Systems, Inc.
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Nutanix Enterprise AI (NAI) is a centralized inferencing control plane that is secure and sovereign, helping standardize generative AI infrastructure across an organization to create adaptive AI factories and agents.
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HPE also delivers our software with HPE DX series servers as a service through the HPE GreenLake offering. Some of our OEM partners also sell associated support offerings.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur 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, rising interest rates, recession, political and social unrest, uncertainty surrounding the 2024 U.S. elections, terrorist attacks, hostilities or the perception that hostilities may be imminent, military conflict, war, including the ongoing war in Ukraine and related sanctions as well as measures taken in response to such sanctions, the ongoing military conflict in the Middle East, malicious human acts, climate change, natural disasters (including extreme weather), pandemics or other major public health concerns, and other similar events, and the impact these conditions and events have on the overall demand for enterprise computing infrastructure solutions and on the economic health and general willingness of our current and prospective end customers to purchase our solutions and to continue spending on IT in general.
Biggest changeOur 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 shifts in domestic and international policy, 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 conflict in the Middle East, malicious human acts, climate change, natural disasters (including extreme weather), pandemics or other major public health concerns, and other similar events.
Risks Related to Financial, Accounting, Regulatory, Tax, and Other Legal Matters • our ability to maintain an effective system of internal controls; • any changes to, or failure to comply with, laws and regulations, as well as the impact of and any regulatory investigations and enforcement actions and other legal proceedings; and • complex and evolving U.S. and foreign privacy, data use and data protection, content, competition, consumer protection, and other laws and regulations.
Risks Related to Financial, Accounting, Regulatory, Tax, and Other Legal Matters • our ability to maintain an effective system of internal controls; • any changes to, or failure to comply with, laws and regulations, as well as the impact of any regulatory investigations and enforcement actions and other legal proceedings; and • complex and evolving U.S. and foreign privacy, data use and data protection, content, competition, consumer protection, and other laws and regulations.
Current or future providers of hardware, software applications, hypervisors, or data management tools could make changes that would diminish the ability of our solutions to interoperate with them, and significant additional time and effort may be necessary to ensure the continued compatibility of our solutions, which might not be possible at all.
Current or future providers of hardware, software applications, hypervisors, or data management tools could make changes that would diminish the ability of our solutions to interoperate with them. Significant additional time and effort may be necessary to ensure the continued compatibility of our solutions, which might not be possible at all.
If we fail to develop or introduce new or enhanced solutions on a timely or cost-effective basis, our ability to attract and retain end customers could be impaired and our brand, reputation and competitive position could be harmed. We operate in a dynamic environment characterized by rapidly changing technologies and industry standards and technological obsolescence.
If we fail to develop or introduce new or enhanced solutions on a timely or cost-effective basis, our ability to attract and retain end customers could be impaired and our brand, reputation and competitive position could be harmed. We operate in a dynamic environment characterized by rapidly changing technologies, industry standards and technological obsolescence.
Such laws and regulations may require companies to implement new privacy and security policies, conduct transfer impact assessments, permit individuals to access, correct and delete personal information stored or maintained by such companies, inform individuals of security breaches that affect their personal information, and, among others, obtain individuals’ consent to use personal information for certain purposes.
Such laws and regulations may require companies to implement new privacy and security policies, conduct transfer and privacy impact assessments, permit individuals to access, correct and delete personal information stored or maintained by such companies, inform individuals of security breaches that affect their personal information, and, among others, obtain individuals’ consent to use personal information for certain purposes.
Although we are working to comply with those federal, state and foreign laws and regulations, industry standards, contractual obligations, and other legal obligations that apply to us, those laws, regulations, standards, and obligations are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another, other requirements or legal obligations, our practices or the features of our solutions.
Although we are working to comply with federal, state and foreign laws and regulations, industry standards, contractual obligations, and other legal obligations that apply to us, those laws, regulations, standards, and obligations are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another, other requirements or legal obligations, our practices or the features of our solutions.
If we are unable to generate such cash flows, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive.
If we are unable to generate such cash flows, we may be required to adopt one or more alternatives, such as obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive, restructuring debt, or selling assets.
These challenges related to acquisitions, divestitures or investments could adversely affect our business, operating results, financial condition, and prospects. We are exposed to fluctuations in currency exchange rates, which could negatively affect our operating results. Our sales contracts are denominated in U.S. dollars, and therefore, substantially all of our revenue is not subject to foreign currency risk.
These challenges related to acquisitions, divestitures or investments could adversely affect our business, operating results, financial condition, and prospects. We are exposed to fluctuations in currency exchange rates, which could negatively affect our operating results. Our sales contracts are denominated in U.S. dollars; therefore, substantially all of our revenue is not subject to foreign currency risk.
Factors that could cause fluctuations in the market price of our securities include the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the market prices and trading volumes of high technology stocks; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • changes in financial estimates by any analysts who follow our company, including as a result of any current and future business model transitions, or our failure to meet these estimates or the expectations of investors; • the financial projections we may provide to the public, any changes in these projections, or any failure to meet or exceed these projections; • announcements by us or our competitors of new products and solutions or new or terminated significant contracts, commercial relationships or capital commitments; • public analyst or investor reaction to our press releases, other public announcements and filings with the Securities and Exchange Commission; • rumors and market speculation involving us or other companies in our industry; 47 Table of Contents • actual or anticipated changes or fluctuations in our operating results; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • actual or threatened litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or our solutions, or third-party proprietary rights; • rumored, announced or completed acquisitions of businesses or technologies of or by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations, or principles; • any major changes in our management or our Board of Directors; • general economic conditions and slow or negative growth of our markets; and • other events or factors which may be outside of our control, such as political and social unrest, terrorist attacks, hostilities, war, malicious human acts, climate change, natural disasters (including extreme weather), pandemics or other major public health concerns, and other similar events, or responses to these events.
Factors that could cause fluctuations in the market price of our securities include the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the market prices and trading volumes of high technology stocks; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • changes in financial estimates by any analysts who follow our company, including as a result of any current and future business model transitions, or our failure to meet these estimates or the expectations of investors; • the financial projections we may provide to the public, any changes in these projections, or any failure to meet or exceed these projections; • announcements by us or our competitors of new products and solutions or new or terminated significant contracts, commercial relationships or capital commitments; • public analyst or investor reaction to our press releases, other public announcements and filings with the Securities and Exchange Commission; 51 Table of Contents • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes or fluctuations in our operating results; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • actual or threatened litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or our solutions, or third-party proprietary rights; • rumored, announced or completed acquisitions of businesses or technologies of or by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations, or principles; • any major changes in our management or our Board of Directors; • general economic conditions and slow or negative growth of our markets; and • other events or factors which may be outside of our control, such as political and social unrest, terrorist attacks, hostilities, war, malicious human acts, climate change, natural disasters (including extreme weather), pandemics or other major public health concerns, and other similar events, or responses to these events.
Our business depends on manufacturers (including Supermicro and our OEM partners) to produce the hardware platforms on which our software runs (including both the Nutanix-branded NX series appliances and the various third-party appliances that are included on our hardware compatibility list) as well as various products that are beyond our control or the control of such manufacturers, which exposes us to direct and indirect risks beyond our control, including reduced control over quality assurance, product costs, product availability, supply chain disruptions and delays, and potential reputational harm and brand damage.
Our business depends on manufacturers (including Supermicro and our OEM partners) to produce the hardware platforms on which our software runs (including both the Nutanix-branded NX series hardware platforms and the various third-party hardware platforms that are included on our hardware compatibility list) as well as various products that are beyond our control or the control of such manufacturers, which exposes us to direct and indirect risks beyond our control, including reduced control over quality assurance, product costs, product availability, supply chain disruptions and delays, and potential reputational harm and brand damage.
Further, the increase in some costs associated with our cloud-based services may be difficult to predict over time, especially in light of our lack of historical experience with the costs of delivering cloud-based versions of our solutions. 19 Table of Contents We believe our plan has certain advantages; however, it also presents a number of risks to us including, but not limited to, the following: • arrangements entered into on a ratable subscription basis may delay when we can recognize revenue, even when compared to similar term-based subscription sales, which we currently recognize upfront, and can require up-front costs, which may be significant; • since revenue is recognized ratably over the term of the customer agreement, any decrease in customer purchases of our ratable subscription-based products and services will not be fully reflected in our operating results until future periods.
Further, the increase in some costs associated with our cloud-based services may be difficult to predict over time, especially in light of our lack of historical experience with the costs of delivering cloud-based versions of our solutions. 21 Table of Contents We believe our plan has certain advantages; however, it also presents a number of risks to us including, but not limited to, the following: • arrangements entered into on a ratable subscription basis may delay when we can recognize revenue, even when compared to similar term-based subscription sales, which we currently recognize upfront, and can require up-front costs, which may be significant; • since revenue is recognized ratably over the term of the customer agreement, any decrease in customer purchases of our ratable subscription-based products and services will not be fully reflected in our operating results until future periods.
If one or more holders elect to convert their 2027 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity.
If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity.
To the extent that vendors develop products that compete with ours, they have in the past, and may again in the future, withhold their cooperation, decline to share access, certify our solutions or sell or make available to us their proprietary APIs, protocols or formats or engage in practices to actively limit the functionality, or compatibility, and certification of our products.
To the extent that vendors develop products that compete with ours, they have in the past, and may again in the future, withhold their cooperation, decline to share access, certify our solutions or sell or make available to us their proprietary APIs, protocols or formats or engage in practices to actively limit the functionality, compatibility, certification, or support of our products.
In addition, retaliatory acts by countries subject to Western sanctions could include cyber attacks that could disrupt the economy or that could also either directly or indirectly impact our operations. We also continue to incorporate AI solutions and features into our platform, which may result in security incidents or otherwise increase cybersecurity risks.
In addition, retaliatory acts by countries subject to Western sanctions could include cyber attacks that could disrupt the economy or that could also either directly or indirectly impact our operations. We also continue to incorporate AI solutions and features into our platform, which may result in security incidents, jailbreaking, or otherwise increase cybersecurity risks.
Additionally, if we are unable to establish relationships with strong channel partners in key growth regions, our ability to sell our solutions in these regions may be adversely affected. Our agreements with our channel partners are non-exclusive, meaning our channel partners may offer end customers the products of several different companies, including products that compete with ours.
Additionally, if we are unable to establish relationships with strong channel partners in key growth regions, our ability to sell our solutions in these regions may be adversely affected. Our agreements with our channel partners are generally non-exclusive, meaning our channel partners may offer end customers the products of several different companies, including products that compete with ours.
Our agreement with Supermicro does not contain any price assurances, and increases in component costs, without a corresponding increase in the price of our NX series solutions, could reduce the amount that an end customer pays for our software, thereby adversely affecting our billings and revenue.
Our agreement with Supermicro does not contain any price assurances, and increases in component costs, without a corresponding increase in the price of our NX series solutions, could reduce the amount that an end customer pays for our software, thereby adversely affecting our revenue.
We could be required to expend significant capital and other resources to alleviate problems caused by such actual or perceived breaches and to remediate our systems, we could be exposed to a risk of loss, litigation or regulatory action and possible liability, and our ability to operate our business may be impaired.
We could be required to expend significant capital and other resources to alleviate problems caused by such actual or perceived breaches or incidents and to remediate our systems, we could be exposed to a risk of loss, litigation or regulatory action and possible liability, and our ability to operate our business may be impaired.
In addition, upon conversion of the 2027 Notes, unless we elect to deliver solely shares of our Class A common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2027 Notes being converted.
In addition, upon conversion of the Notes, unless we elect to deliver solely shares of our Class A common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the Notes being converted.
From time to time, we release earnings guidance in our earnings conference calls, earnings releases, investor presentations, or otherwise, regarding our future performance that represents our management’s estimates as of the date of release. This guidance includes forward-looking statements based on projections prepared by our management.
From time to time, we release financial guidance in our earnings conference calls, earnings releases, investor presentations, or otherwise, regarding our future performance that represents our management’s estimates as of the date of release. This guidance includes forward-looking statements based on projections prepared by our management.
Therefore, any improper usage of open source, including a failure to identify changes in license terms, could result in unanticipated obligations regarding our solutions and technologies, which could have an adverse impact on our intellectual property rights and our ability to derive revenue from solutions incorporating the open source software. • If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur legal expenses defending against such allegations, or engineering expenses in developing a substitute solution.
Therefore, any improper or unintended usage of open source software, including a failure to identify changes in license terms, could result in unanticipated obligations regarding our solutions and technologies, which could have an adverse impact on our intellectual property rights and our ability to derive revenue from solutions incorporating the open source software. • If an author or other third party who distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur legal expenses defending against such allegations, or engineering expenses in developing a substitute solution.
In addition, as a result of our rapid growth, a large percentage of our sales force is new to our company and our solutions and therefore less effective than our more seasoned employees. 37 Table of Contents If our new sales employees, particularly those focused on sales of our solutions to new and existing large enterprises, service providers and government entities, do not become fully productive on the timelines that we have projected, or if we are unable to ensure that our seasoned sales employees remain productive, our revenue will not increase at anticipated levels and our ability to achieve long-term projections may be negatively impacted.
In addition, as a result of our rapid growth, a large percentage of our sales force is new to our company and our solutions and therefore less effective than our more seasoned employees. 40 Table of Contents If our new sales employees, particularly those focused on sales of our solutions to new and existing large enterprises, service providers and government entities, do not become fully productive on the timelines that we have projected, or if we are unable to ensure that our seasoned sales employees remain productive, our revenue will not increase at anticipated levels and our ability to achieve long-term projections may be negatively impacted.
A number of companies, both within and outside of the enterprise and cloud computing infrastructure industry, hold a large number of patents covering aspects of storage, servers, networking, desktop, security, virtualization, database management, cloud services products, and other technologies relevant to our products.
A number of companies, both within and outside of the enterprise and cloud computing infrastructure industry, hold a large number of patents covering aspects of storage, servers, networking, desktop, security, virtualization, containerization, database management, cloud services products, and other technologies relevant to our products.
We have reserved a substantial number of shares of our Class A common stock for issuance upon vesting or exercise of our equity compensation plans and upon conversion of the 2027 Notes. We have also registered the offer and sale of all shares of our Class A common stock that we may issue under our equity compensation plans.
We have reserved a substantial number of shares of our Class A common stock for issuance upon vesting or exercise of our equity compensation plans and upon conversion of the Notes. We have also registered the offer and sale of all shares of our Class A common stock that we may issue under our equity compensation plans.
The conversion of some or all of the 2027 Notes, to the extent we deliver shares upon conversion thereof, will dilute the ownership interests of existing stockholders, reduce our earnings per share and potentially have an adverse effect on the price of our securities.
The conversion of some or all of the Notes, to the extent we deliver shares upon conversion thereof, will dilute the ownership interests of existing stockholders, reduce our earnings per share and potentially have an adverse effect on the price of our securities.
Although we believe that we have complied with our obligations under the various applicable licenses for open source software that we use, our processes used to monitor how open source software is used and what license applies to the open source software could be subject to error.
Although we believe that we have complied with our obligations under the various licenses for open source software that we use, our processes used to monitor how open source software is used and what license applies could be subject to error.
If such a claim were to prevail, we may have to change the names and branding that we use in the affected countries or territories and we could incur other costs. 33 Table of Contents We currently have a number of agreements in effect pursuant to which we have agreed to defend, indemnify and hold harmless our end customers, suppliers and channel and other partners from damages and costs which may arise from allegations of infringement, or actual infringement, by our products and services of third-party patents or other intellectual property rights in the United States and/or in other countries.
If such a claim were to prevail, we may have to change the names and branding that we use in the affected countries or territories and we could incur other costs. 36 Table of Contents We currently have a number of agreements in effect pursuant to which we have agreed to defend, indemnify and hold harmless our end customers, suppliers and channel and other partners from damages and costs which may arise from allegations of infringement, or actual infringement, by our products and services of third-party patents or other intellectual property rights in the United States and/or in other countries.
Furthermore, if we make downward revisions of our previously announced guidance, if we withdraw our previously announced guidance, or if our publicly announced guidance of future operating results fails to meet expectations of securities analysts, investors or other interested parties, the price of our securities would decline.
Furthermore, if we make downward revisions to our previously announced guidance, if we withdraw our previously announced guidance, or if our publicly announced guidance regarding future operating results fails to meet expectations of securities analysts, investors or other interested parties, the price of our securities would decline.
Our failure to successfully manage our international operations and the associated risks effectively could limit the future growth of our business. 31 Table of Contents Risks Related to Cybersecurity and Intellectual Property If we are the victim of a cyber attack or other cybersecurity incident and our networks, computer systems or software solutions are breached or unauthorized access to sensitive or proprietary information, including employee or customer data, otherwise occurs, our business operations may be interrupted, our reputation and brand may be damaged, and we may incur significant liabilities.
Our failure to successfully manage our international operations and the associated risks effectively could limit the future growth of our business. 34 Table of Contents Risks Related to Cybersecurity and Intellectual Property If we are the victim of a cyber attack or other cybersecurity incident and our networks, computer systems or software solutions are breached or unauthorized access to sensitive or proprietary information, including employee or customer data, otherwise occurs, our business operations may be interrupted, our reputation and brand may be damaged, and we may incur significant liabilities.
If the suppliers of the components of compatible hardware appliances increase prices of components, experience delays, disruptions, capacity constraints, quality control problems in their manufacturing operations or adverse changes to their financial condition, our ability to ship appliances to our channel partners or end customers in a timely manner and at competitive prices could be impaired, and our customers' ability to acquire hardware on which to run our software could be impaired, and our competitive position, brand, reputation, and operating results could be adversely affected.
If the suppliers of the components of compatible hardware platforms increase prices of components, experience delays, disruptions, capacity constraints, quality control problems in their manufacturing operations or adverse changes to their financial condition, our ability to ship hardware platforms to our channel partners or end customers in a timely manner and at competitive prices could be impaired, and our customers' ability to acquire hardware on which to run our software could be impaired, and our competitive position, brand, reputation, and operating results could be adversely affected.
Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations could result in additional cost and liability to us, damage our reputation and brand, inhibit sales, and adversely affect our business and operating results. 42 Table of Contents Failure to comply with anti-corruption and anti-money laundering laws, including the U.S.
Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations could result in additional cost and liability to us, damage our reputation and brand, inhibit sales, and adversely affect our business and operating results. 45 Table of Contents Failure to comply with anti-corruption and anti-money laundering laws, including the U.S.
If we fail to introduce new or enhanced solutions that meet the needs of our end customers, such as Project Beacon, or penetrate new markets in a timely fashion, we may lose market share and our business, operating results and prospects could be adversely affected. 20 Table of Contents Developments or improvements in enterprise IT infrastructure technologies may materially and adversely affect the demand for our solutions.
If we fail to introduce new or enhanced solutions that meet the needs of our end customers, such as Project Beacon, or penetrate new markets in a timely fashion, we may lose market share, and our business, operating results, and prospects could be adversely affected. 22 Table of Contents Developments or improvements in enterprise IT infrastructure technologies may materially and adversely affect the demand for our solutions.
In addition, some countries have enacted, or are currently considering, legislation that imposes local storage and processing of data to avoid any form of transfer to a third country, or other restrictions on transfer and disclosure of personal data outside of that country which may impact our compliance obligations, potentially exposing us to liability, and increase the cost and complexity of delivering our products and services.
In addition, some countries have enacted, or are currently considering, legislation that requires local storage and processing of data to avoid any form of transfer to a third country, or other restrictions on transfer and disclosure of personal data outside of that country which may impact our compliance obligations, potentially exposing us to liability, and increase the cost and complexity of delivering our products and services.
Risks Related to Cybersecurity and Intellectual Property • the occurrence of security breaches, improper access to or disclosure of our data or user data, and other cyber incidents or undesirable activity on our platform; and • our ability to obtain, maintain, protect, and enforce our intellectual property rights. 11 Table of Contents Risks Related to Employee Matters • our reliance on key personnel and ability to attract, train, incentivize, retain, and/or ramp to full productivity, qualified employees and key personnel.
Risks Related to Cybersecurity and Intellectual Property • the occurrence of security breaches, improper access to or disclosure of our data or user data, and other cyber incidents or undesirable activity on our platform; and • our ability to obtain, maintain, protect, and enforce our intellectual property rights. 12 Table of Contents Risks Related to Employee Matters • our reliance on key personnel and ability to attract, train, incentivize, retain, and/or ramp to full productivity, qualified employees and key personnel.
Our currently issued patents and any patents that may be issued in the future with respect to pending or future patent applications may not provide sufficiently broad protection or they may not prove to be enforceable in actions against alleged infringers. 34 Table of Contents Protecting against the unauthorized use of our intellectual property, solutions and other proprietary rights is expensive and difficult, particularly internationally.
Our currently issued patents and any patents that may be issued in the future with respect to pending or future patent applications may not provide sufficiently broad protection or they may not prove to be enforceable in actions against alleged infringers. 37 Table of Contents Protecting against the unauthorized use of our intellectual property, solutions and other proprietary rights is expensive and difficult, particularly internationally.
The occurrence of any one of these risks could negatively affect our operating results in any particular quarter, which could cause the price of our securities to decline. 24 Table of Contents Because a significant portion of our revenue is recognized ratably over the term of the contractual service period, downturns or upturns in sales are not immediately reflected in full in our results of operations.
The occurrence of any one of these risks could negatively affect our operating results in any particular quarter, which could cause the price of our securities to decline. 27 Table of Contents Because a significant portion of our revenue is recognized ratably over the term of the contractual service period, downturns or upturns in sales are not immediately reflected in full in our results of operations.
("Tessell") alleging that Tessell engaged in willful copyright and patent infringement (including theft of our source code and intellectual property related to our database service offering) and commenced separate arbitration proceedings against Tessell’s founders. Litigation is unpredictable and we may not win a litigation even if there is significant evidence supporting our claims and defenses.
("Tessell") alleging that Tessell engaged in willful copyright and patent infringement (including theft of our source code and intellectual property related to our database service offering) and commenced separate arbitration proceedings against Tessell’s founders. Litigation and arbitration are unpredictable and we may not win a litigation or arbitration even if there is significant evidence supporting our claims and defenses.
In addition, even if holders of the 2027 Notes do not elect to convert their 2027 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of such 2027 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
In addition, even if holders of the Notes of a series do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes of such series as a current rather than long-term liability, which would result in a material reduction of our net working capital.
Consequently, we can make no assurance that these transactions, once undertaken and announced, will close. 53 Table of Contents These kinds of acquisitions, divestitures or investments may result in unforeseen expenditures and operating and integration difficulties, especially if the acquisitions, divestitures or investments are more complex in structure and scope, including due to the geographic location of the acquired company.
Consequently, we can make no assurance that these transactions, once undertaken and announced, will close. 57 Table of Contents These kinds of acquisitions, divestitures or investments may result in unforeseen expenditures and operating and integration difficulties, especially if the acquisitions, divestitures or investments are more complex in structure and scope, including due to the geographic location of the acquired company.
In addition, if the security measures of our end customers, partners, vendors, or suppliers are compromised, even without any actual compromise of our own systems or of our solutions used by such end customers, partners, vendors, or suppliers, we may face negative publicity, reputational harm or brand damage if our end customers, partners, vendors, or suppliers or anyone else incorrectly attributes the blame for such security breaches to us or our solutions.
In addition, if the security measures of our end customers, partners, vendors, or suppliers are compromised, even without any actual compromise of our own systems or of our solutions used by such end customers, partners, vendors, or suppliers, we may face negative publicity, reputational harm or brand damage if our end customers, partners, vendors, or suppliers or anyone else incorrectly attributes the blame for such incidents to us or our solutions.
Significant natural disasters (such as earthquakes, fires, floods, and extreme weather), man-made problems (such as significant power outages, security breaches, acts of terrorism or war, civil unrests, or geopolitical turmoil), and other similar events that may be outside of our control could have an adverse impact on our business and operating results.
Significant natural disasters (such as earthquakes, fires, floods, and extreme weather), man-made problems (such as significant power outages, security breaches, acts of terrorism or war, civil unrest, or geopolitical turmoil), and other similar events that may be outside of our control could have an adverse impact on our business and operating results.
Any such issuance could result in substantial dilution to our existing stockholders and cause the market price of our Class A common stock to decline. 48 Table of Contents We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which would cause the price of our securities to decline.
Any such issuance could result in substantial dilution to our existing stockholders and cause the market price of our Class A common stock to decline. 52 Table of Contents We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which would cause the price of our securities to decline.
We rely on a limited number of suppliers, and in some cases single-source suppliers, for several key hardware components of the Nutanix-branded NX series appliances. These components are generally purchased on a purchase order basis through Supermicro, and we do not have long-term supply contracts with these suppliers.
We rely on a limited number of suppliers, and in some cases single-source suppliers, for several key hardware components of the Nutanix-branded NX series hardware platforms. These components are generally purchased on a purchase order basis through Supermicro, and we do not have long-term supply contracts with these suppliers.
Federal Trade Commission ("FTC") and various state, local and foreign bodies, data protection authorities, and agencies. 40 Table of Contents The U.S. federal and various state and foreign governments have adopted or proposed limitations on the collection, use, storage, disclosure, and transfer of personal information of individuals, including end customers and employees.
Federal Trade Commission ("FTC") and various state, local and foreign bodies, data protection authorities, and agencies. 43 Table of Contents The U.S. federal and various state and foreign governments have adopted or proposed limitations on the collection, use, storage, disclosure, and transfer of personal information of individuals, including end customers and employees.
We may make investments or otherwise incur costs associated with future growth that may not translate into billings or revenues or otherwise result in the realization of their anticipated benefits within the expected timeframe or at all, and the return on these investments may be lower, if any, or may develop more slowly than we expect. 17 Table of Contents If we are unable to sustain or manage our growth effectively, we may not be able to take advantage of market opportunities.
We may make investments or otherwise incur costs associated with future growth that may not translate into revenues or otherwise result in the realization of their anticipated benefits within the expected timeframe or at all, and the return on these investments may be lower, if any, or may develop more slowly than we expect. 19 Table of Contents If we are unable to sustain or manage our growth effectively, we may not be able to take advantage of market opportunities.
These risks include: • longer sales cycles and the associated risk that substantial time and resources may be spent on a potential end customer that elects not to purchase our solutions; • competition from companies that traditionally target larger enterprises, service providers and government entities and that may have pre-existing relationships or purchase commitments from such end customers; • increased purchasing power and leverage held by large end customers in negotiating contractual arrangements with us; and • more stringent requirements in our support service contracts, including demand for quicker support response times and penalties for any failure to meet support requirements.
These risks include: • longer sales cycles and the associated risk that substantial time and resources may be spent on a potential end customer that elects not to purchase our solutions; • competition from companies that traditionally target larger enterprises, service providers and government entities and that may have pre-existing relationships or purchase commitments from such end customers; 17 Table of Contents • increased purchasing power and leverage held by large end customers in negotiating contractual arrangements with us; and • more stringent requirements in our support service contracts, including demand for quicker support response times and penalties for any failure to meet support requirements.
More generally, computer malware, viruses, social engineering (predominantly spear phishing attacks), and general hacking have become prevalent in our industry, particularly against cloud services, and we and companies like us can suffer security breaches from a variety of causes, whether due to third-party action, software bugs or vulnerabilities or coding errors, physical break-ins, employee error, malfeasance, or otherwise.
More generally, computer malware, viruses, social engineering (predominantly spear phishing attacks), and general hacking have become prevalent in our industry, particularly against cloud services, and we and companies like us can suffer security breaches and other cybersecurity incidents from a variety of causes, whether due to third-party action, software bugs or vulnerabilities or coding errors, physical break-ins, employee error, malfeasance, or otherwise.
The introduction of AI technologies into new or existing products may result in new or enhanced governmental or regulatory scrutiny, litigation, privacy, confidentiality or security risks, ethical concerns, legal liability, or other complications that could adversely affect our business, reputation, or financial results.
The introduction of AI technologies into new or existing products and services may result in new or enhanced governmental or regulatory scrutiny, litigation, privacy, confidentiality or security risks, ethical concerns, legal liability, or other complications that could adversely affect our business, reputation, or financial results.
Competition for highly skilled personnel, particularly in sales and engineering, is frequently intense, especially in the San Francisco Bay Area, where we are headquartered and have a substantial need for such personnel. This competition for highly skilled personnel results in increased costs in the form of cash and stock-based compensation.
Competition for highly skilled personnel, particularly in sales and engineering, is frequently intense, especially in the San Francisco Bay Area, where we are headquartered and have a substantial need for engineering talent. This competition for highly skilled personnel results in increased costs in the form of cash and stock-based compensation.
Our financial statements could fail to reflect adequate reserves to cover such a contingency. 44 Table of Contents Changes in global tax laws could increase our worldwide tax rate and could have a material adverse effect on our business, cash flow, results of operations or financial conditions.
Our financial statements could fail to reflect adequate reserves to cover such a contingency. 47 Table of Contents Changes in global tax laws could increase our worldwide tax rate and could have a material adverse effect on our business, cash flow, results of operations or financial conditions.
In addition, as part of the Inflation Reduction Act signed into law in August 2022, the United States implemented a 1% excise tax on the value of certain stock repurchases by publicly traded companies. This tax could increase the costs to us of any share repurchases.
In addition, as part of the Inflation Reduction Act signed into law in August 2022, the United States implemented a 1% excise tax on the value of certain stock repurchases by publicly traded companies. This tax may increase the costs to us of any share repurchases.
Failure to comply with these requirements by either us or our channel partners could subject us to investigations, fines and other penalties, which could have an adverse effect on our business, operating results, financial condition, and prospects. As an example, the U.S.
Failure to comply with these requirements by either us or our channel partners could subject us to investigations, fines and other penalties, which could have an adverse effect on our business, operating results, financial condition, and prospects. For example, the U.S.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness or to pay cash amounts due upon conversion, upon required repurchase or at maturity of the 2027 Notes.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness or to pay cash amounts due upon conversion, upon required repurchase or at maturity of the applicable series of the Notes.
We cannot guarantee that the share repurchase program will be fully consummated or that it will enhance long-term stockholder value. Share repurchases under the program could affect, and increase the volatility of, the price of our Class A common stock and will diminish our cash reserves.
We cannot guarantee that the share repurchase program will be fully executed or that it will enhance long-term stockholder value. Share repurchases under the program could affect, and increase the volatility of, the price of our Class A common stock and will diminish our cash reserves.
Foreign Corrupt Practices Act of 1977, as amended ("FCPA"), the United Kingdom Bribery Act of 2010 ("UK Bribery Act"), U.S. or foreign sanctions regimes and export or import control laws, and any trade regulations ensuring fair trade practices; • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; • requirements to comply with foreign privacy, data protection and information security laws and regulations and the risks and costs of noncompliance, including without limitation any new or evolving laws and regulations relating to the use of data in AI; • increased expectations from foreign customers and other stakeholders about our performance relating to environmental, social and governance factors (such as climate-related performance), and requirements to comply with foreign sustainability standards or initiatives, including new sustainability standards or initiatives in the European Union; • reduced or uncertain protection for intellectual property rights in some countries; 30 Table of Contents • impediments to the flow of foreign exchange capital payments and receipts due to exchange controls instituted by certain foreign governments; • increased expenses incurred in establishing and maintaining corporate entities, office space and equipment for our international operations; • difficulties in managing and staffing international offices and increased travel, infrastructure and legal and regulatory compliance costs associated with multiple international locations, including costs related to additional regulatory reviews or audits, financial accounting and reporting obligations and international cybersecurity requirements; • greater difficulty in identifying, attracting and retaining local experienced personnel, and the costs and expenses associated with such activities; • the challenge of managing a development team in geographically disparate locations; • management communication and integration problems resulting from cultural and geographic dispersion; • differing employment practices and labor relations issues; • fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where we do business; and • treatment of revenue from international sources for tax purposes and changes in tax laws, regulations or official interpretations, including being subject to foreign tax laws and being liable for paying withholding, income or other taxes in foreign jurisdictions.
Foreign Corrupt Practices Act of 1977, as amended ("FCPA"), the United Kingdom Bribery Act of 2010 ("UK Bribery Act"), U.S. or foreign sanctions regimes and export or import control laws, and any trade regulations ensuring fair trade practices; 33 Table of Contents • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; • requirements to comply with foreign privacy, data protection and information security laws and regulations and the risks and costs of noncompliance, including new and evolving laws governing AI and data privacy, such as the European Union's AI Act; • increased expectations from foreign customers and other stakeholders about our performance relating to environmental, social and governance factors (such as climate-related performance), and requirements to comply with foreign sustainability standards or initiatives, including new sustainability standards and due diligence obligations in the European Union, such as the Corporate Sustainability Reporting Directive ("CSRD") and the Corporate Sustainability Due Diligence Directive ("CSDDD"); • reduced or uncertain protection for intellectual property rights in some countries; • impediments to the flow of foreign exchange capital payments and receipts due to exchange controls instituted by certain foreign governments; • increased expenses incurred in establishing and maintaining corporate entities, office space and equipment for our international operations; • difficulties in managing and staffing international offices and increased travel, infrastructure and legal and regulatory compliance costs associated with multiple international locations, including costs related to additional regulatory reviews or audits, financial accounting and reporting obligations and international cybersecurity requirements; • greater difficulty in identifying, attracting and retaining local experienced personnel, and the costs and expenses associated with such activities; • the challenge of managing a development team in geographically disparate locations; • management communication and integration problems resulting from cultural and geographic dispersion; • differing employment practices and labor relations issues; • fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where we do business; and • treatment of revenue from international sources for tax purposes and changes in tax laws, regulations or official interpretations, including being subject to foreign tax laws and being liable for paying withholding, income or other taxes in foreign jurisdictions.
In order to restore, maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting to comply with the SEC rules that implement Sections 302 and 404 of the Sarbanes-Oxley Act, we have expended and anticipate that we may continue to expend significant resources and undertake various actions, including implementing our remediation plan, incurring accounting-related costs, implementing new internal controls and procedures, and providing significant management oversight.
In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting to comply with the SEC rules that implement Sections 302 and 404 of the Sarbanes-Oxley Act, we have expended and anticipate that we may continue to expend significant resources and undertake various actions, including incurring accounting-related costs, implementing new internal controls and procedures, and providing significant management oversight.
Any legal proceedings or claims we may be involved in, including securities class action litigation that could result from volatility in our stock price, could be costly and time-consuming to defend and could harm our reputation regardless of the outcome.
Any legal proceedings or claims we may be involved in, including securities class action litigation that could result from volatility in our stock price, could be costly and time-consuming to defend and could harm our reputation regardless of their outcome.
In addition, the existence of the 2027 Notes may encourage short selling by market participants because the conversion of the 2027 Notes could be used to satisfy short positions, or anticipated conversion of the 2027 Notes into shares of our Class A common stock could depress the price of our securities. 49 Table of Contents We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value.
In addition, the existence of the Notes may encourage short selling by market participants because the conversion of the Notes could be used to satisfy short positions, or anticipated conversion of the Notes into shares of our Class A common stock could depress the price of our securities. 53 Table of Contents We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value.
The inability of Supermicro or other manufacturers to produce adequate supplies of hardware appliances could cause a delay in customers’ ability to consume our software and our order fulfillment, and our business, operating results and prospects, would be adversely affected.
The inability of Supermicro or other manufacturers to produce adequate supplies of hardware platforms could cause a delay in customers’ ability to consume our software and our order fulfillment, and our business, operating results and prospects, would be adversely affected.
Furthermore, we extensively test and qualify the components that are used in NX-branded appliances and other appliances on our hardware compatibility list, including hardware appliances from our OEM partners, to ensure that they meet certain quality and performance specifications.
Furthermore, we extensively test and qualify the components that are used in NX-branded hardware platforms and other platforms on our hardware compatibility list, including hardware platforms from our OEM partners, to ensure that they meet certain quality and performance specifications.
Conversion of the 2027 Notes may dilute the ownership interest of existing stockholders, or may otherwise depress the price of our securities.
Conversion of the Notes may dilute the ownership interest of existing stockholders, or may otherwise depress the price of our securities.
Developing solutions that interoperate properly requires substantial partnering, capital investment and employee resources, as well as the cooperation of the vendors or developers of the software applications and hypervisors both with respect to product development and product support.
Developing solutions that interoperate properly requires substantial partnering, capital investment and employee resources, as well as the cooperation of the vendors or developers of the software applications and hypervisors both with respect to product development, certification, and support processes.
Additionally, we sometimes rely on our channel partners to satisfy certain regulatory obligations that we would otherwise have to satisfy if we sold directly to the government entities, and our channel partners may be unable or unwilling to satisfy these obligations in the future.
We also sometimes rely on our channel partners to satisfy certain regulatory obligations that we would otherwise have to satisfy if we sold directly to the government entities, and our channel partners may be unable or unwilling to satisfy these obligations in the future.
The loss of the services of any of our executive officers or key employees, and any failure to have in place and execute an effective succession plan for key executives, could disrupt our business and have a significant negative impact on our operating results, prospects and future growth. 36 Table of Contents In addition, our success and growth also depend substantially on our ability to continue to attract, hire, integrate, train, retain, and adequately incentivize qualified and highly skilled personnel, in particular, in sales and engineering.
The loss of the services of any of our executive officers or key employees, and any failure to have in place and execute an effective succession plan for key executives, could disrupt our business and have a significant negative impact on our operating results, prospects and future growth. 39 Table of Contents In addition, our success and growth also depend substantially on our ability to continue to attract, hire, integrate, train, retain, and adequately motivate qualified and highly skilled personnel, in particular, in sales and engineering.
Violations of U.S. sanctions or export control laws can result in significant fines or penalties and possible incarceration for responsible employees and managers could be imposed for criminal violations of these laws. 43 Table of Contents We also note that if our channel partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected, through reputational harm as well as other negative consequences including government investigations and penalties.
Violations of U.S. sanctions or export control laws can result in significant fines or penalties and possible incarceration for responsible employees and managers could be imposed for criminal violations of these laws. 46 Table of Contents We also note that if our channel, alliance and OEM partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected, through reputational harm as well as other negative consequences including government investigations and penalties.
We have sold and anticipate selling more of our products and services as cloud-based offerings - which include offerings hosted on public cloud infrastructure as well as part of our own Nutanix Cloud Platform - on a ratable subscription basis.
We have sold and anticipate selling more of our products and services as cloud-based offerings - which include offerings hosted on public cloud infrastructure as well as part of the Nutanix Cloud Platform - on a ratable subscription basis.
Furthermore, fulfilling orders for NX series appliances or other hardware appliances on which our software runs may not be a priority for such manufacturers in guiding their business decisions and operational commitments.
Furthermore, fulfilling orders for NX series hardware platforms or other hardware platforms on which our software runs may not be a priority for such manufacturers in guiding their business decisions and operational commitments.
Our failure to repurchase the 2027 Notes at a time when the repurchase is required by the applicable indenture or to pay cash upon conversions of such 2027 Notes or at their maturity as required by the applicable indenture would constitute a default under such indenture.
Our failure to repurchase the Notes of a series at a time when the repurchase is required by the applicable indenture or to pay cash upon conversions of such Notes or at their maturity as required by the applicable indenture would constitute a default under such indenture.
Cyber attacks designed to gain access to sensitive or proprietary information by breaching mission critical systems of large organizations are constantly evolving, and high-profile electronic security breaches leading to the unauthorized release of sensitive or proprietary information, including employee and customer information, have occurred at a number of large companies in recent years.
Cyber attacks designed to gain access to sensitive or proprietary information by breaching mission critical systems of large organizations are constantly evolving, and high-profile electronic security breaches and other cybersecurity incidents leading to the unauthorized release of sensitive or proprietary information, including employee and customer information, have occurred at a number of large companies in recent years.
This choice of forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. 51 Table of Contents Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions.
This choice of forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions.
If any unauthorized access to, or security breach of, our solutions occurs, such an event could result in the loss of data, loss of intellectual property or trade secrets, loss of business, severe reputational or brand damage adversely affecting end customer or investor confidence, regulatory investigations and orders and other enforcement actions, litigation, indemnity obligations, damages for contract breach, and penalties for violation of privacy, data protection and other applicable laws, regulations or contractual obligations.
If any unauthorized access to, or security breach of, or other cybersecurity incident affecting, our solutions occurs, such an event could result in the loss of data, loss of intellectual property or trade secrets, loss of business, severe reputational or brand damage adversely affecting end customer or investor confidence, regulatory investigations and orders and other enforcement actions, litigation, indemnity obligations, damages for contract breach, and penalties for violation of privacy, data protection, artificial intelligence, and other applicable laws, regulations or contractual obligations.
In addition, some of our support offerings commit us to replace defective parts in our appliances as quickly as four hours after the initial customer support call is received, which we satisfy by storing replacement parts inventory in various third-party supply depots in strategic worldwide locations.
In addition, some of our support offerings commit us to replace defective parts in our hardware platforms as quickly as four hours after the initial customer support call is received, which we satisfy by storing replacement parts inventory in various third-party supply depots in strategic worldwide locations.
Our inability to attract and retain the necessary personnel could adversely affect our business, operating results and financial condition. Moreover, we believe that a key contributor to our success and our ability to retain highly skilled personnel has been our corporate culture, which we believe fosters innovation, teamwork, and a passion for our products and customers.
Our inability to attract and retain the necessary personnel could adversely affect our business, operating results and financial condition. Moreover, we believe that a key contributor to our success and our ability to retain a highly skilled workforce has been our company culture, which we believe fosters innovation, teamwork, and a passion for our products and customers.
In the event the conditional conversion feature of the 2027 Notes is triggered, holders of such 2027 Notes will be entitled to convert their 2027 Notes at any time during specified periods at their option.
In the event the conditional conversion feature of the 2027 Notes or the 2029 Notes is triggered, holders of such Notes will be entitled to convert their Notes at any time during specified periods at their option.
Our gross margins may be affected by a variety of factors, including fluctuations in the pricing of our products (including as a result of competitive pricing pressures or increases in component pricing), the degree to which we are successful in selling the value of incremental feature improvements and upgrades, changes in the cost of components of our hardware appliances, customer renewal rates and the degree to which renewals drive our top-line growth, changes in the mix between direct versus indirect sales, changes in the mix of products sold, and the timing and amount of recognized and deferred revenue, particularly as a result of our subscription-based business model.
Our gross and operating margins may be affected by a variety of factors, including fluctuations in the pricing of our products (including as a result of competitive pricing pressures or increases in component pricing), the degree to which we are successful in selling the value of incremental feature improvements and upgrades, customer renewal rates and the degree to which renewals drive our top-line growth, changes in the mix between direct versus indirect sales, changes in the mix of products sold, and the timing and amount of recognized and deferred revenue, particularly as a result of our subscription-based business model.
In addition to ensuring that our solutions interoperate with these hardware and software products initially, we must occasionally update our software to ensure that our solutions continue to interoperate with new or updated versions of these hardware and software products.
In addition to ensuring that our solutions interoperate with these hardware and software products initially, we must regularly update our software to ensure that our solutions continue to interoperate with new or updated versions of these hardware and software products.
We presently incorporate export control compliance requirements into our channel partner agreements; however, no assurance can be given that our channel partners will be able to comply with such requirements.
We presently incorporate export control compliance requirements into our relevant partner agreements; however, no assurance can be given that our partners will be able to comply with such requirements.
Any actual, potential or anticipated attack may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. 32 Table of Contents Furthermore, a high-profile security breach suffered, or perceived to have been suffered, by an industry peer may entail a general loss of trust in our industry and thereby have a similar adverse impact on our business and financial performance as a direct breach suffered by us.
Any actual, potential or anticipated attack or other cybersecurity incident may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. 35 Table of Contents Furthermore, a high-profile security breach or incident suffered, or perceived to have been suffered, by an industry peer may entail a general loss of trust in our industry and thereby have a similar adverse impact on our business and financial performance as a direct breach suffered by us.
If a court were to find either exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business. We do not intend to pay dividends in the foreseeable future.
If a court were to find either exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business. 55 Table of Contents We do not intend to pay dividends in the foreseeable future.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause the price of our securities or trading volume to decline, potentially significantly.
If analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause the price of our securities or trading volume to decline, potentially significantly.
We will need to continue to create valuable software solutions and integrate these solutions across hardware platforms. To compete successfully, we must design, develop, market, and sell new or enhanced solutions that provide increasingly higher levels of performance, capacity, scalability, security, interoperability, application mobility, and reliability and meet the cost expectations of our end customers.
We must continually create valuable software solutions and integrate these solutions across hardware platforms. To compete successfully, we must design, develop, market, and sell new or enhanced solutions that provide increasingly higher levels of performance, capacity, scalability, security, interoperability, application mobility, and reliability and meet the cost expectations of our end customers.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe continually work to improve our security controls based on these standards and industry best practices. 55 Table of Contents • Incident Response and Recovery: We have established a comprehensive Privacy and Cybersecurity Incident Response Program to manage and respond to cybersecurity incidents. This program includes processes for triaging, assessing, escalating, containing, investigating, and remediating incidents.
Biggest changeWe continually work to improve our security controls based on these standards and industry best practices. 60 Table of Contents • Incident Response and Recovery: We have established a comprehensive Privacy and Cybersecurity Incident Response Program to manage and respond to cybersecurity incidents. This program includes processes for triaging, assessing, escalating, containing, investigating, and remediating incidents.
This team assesses incidents' severity, coordinates the response, and communicates with relevant stakeholders. Our Security and Privacy Management Team, including, as appropriate, our CISO, CIO, and CPSO, provides additional expertise and support as needed. 56 Table of Contents
This team assesses incidents' severity, coordinates the response, and communicates with relevant stakeholders. Our Security and Privacy Management Team, including, as appropriate, our CISO, CIO, and CPSO, provides additional expertise and support as needed. 61 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFiscal Year 7/31/19 7/31/20 7/31/21 7/31/22 7/31/23 7/31/24 Nutanix, Inc. $ 100.00 $ 97.75 $ 158.68 $ 66.65 $ 133.04 $ 222.51 Nasdaq Composite Index $ 100.00 $ 132.78 $ 182.62 $ 155.31 $ 181.43 $ 224.29 Nasdaq Computer Index $ 100.00 $ 148.33 $ 213.70 $ 180.46 $ 229.05 $ 302.45 The information on the above graph shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act, and shall not be incorporated by reference into any registration statement or other document filed by us with the SEC, whether made before or after the date of this Annual Report on Form 10-K, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing. 60 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2024 annual meeting of stockholders, which will be filed no later than 120 days after the end of our fiscal year ended July 31, 2024.
Biggest changeFiscal Year 7/31/20 7/31/21 7/31/22 7/31/23 7/31/24 7/31/25 Nutanix, Inc. $ 100.00 $ 162.33 $ 68.18 $ 136.10 $ 227.63 $ 338.76 Nasdaq Composite Index $ 100.00 $ 137.53 $ 116.97 $ 136.63 $ 168.91 $ 204.14 Nasdaq Computer Index $ 100.00 $ 144.07 $ 121.66 $ 154.42 $ 203.90 $ 252.98 65 Table of Contents The information on the above graph shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act, and shall not be incorporated by reference into any registration statement or other document filed by us with the SEC, whether made before or after the date of this Annual Report on Form 10-K, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
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 and may be modified, suspended or discontinued at any time and does not obligate us to repurchase any minimum number of shares.
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.
The graph assumes an initial investment of $100 on July 31, 2019 in the common stock of Nutanix, Inc., the NASDAQ Composite Index and NASDAQ Computer Index and assumes reinvestment of any dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance.
The graph assumes an initial investment of $100 on July 31, 2020 in the common stock of Nutanix, Inc., the NASDAQ Composite Index and NASDAQ Computer Index and assumes reinvestment of any dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance.
This table excludes shares withheld from stock awards to settle employee tax withholding obligations related to the vesting of such awards. 59 Table of Contents Stock Performance Graph The following graph shows a comparison from July 31, 2019 through July 31, 2024 of the cumulative five-year total shareholder return for our Class A common stock based on the closing price on the last day of each respective period.
This table excludes shares withheld from stock awards to settle employee tax withholding obligations related to the vesting of such awards. 64 Table of Contents Stock Performance Graph The following graph shows a comparison from July 31, 2020 through July 31, 2025 of the cumulative five-year total shareholder return for our Class A common stock based on the closing price on the last day of each respective period.
Unregistered Sales of Equity Securities and Use of Proceeds None. 58 Table of Contents Purchases of Equity Securities by the Issuer The following table summarizes the share repurchase activity for the three months ended July 31, 2024: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands, except per share amounts) May 1 - 31, 2024 393 $ 63.67 393 $ 218,913 June 1 - 30, 2024 — $ — — $ 218,913 July 1 - 31, 2024 — $ — — $ 218,913 Total 393 393 (1) In August 2023, our Board of Directors authorized the repurchase of up to $350.0 million of our Class A common stock.
Unregistered Sales of Equity Securities and Use of Proceeds None. 63 Table of Contents Purchases of Equity Securities by the Issuer The following table summarizes the share repurchase activity for the three months ended July 31, 2025: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands, except per share amounts) May 1 - 31, 2025 241 $ 77.11 241 $ 142,805 June 1 - 30 2025 203 $ 74.52 203 $ 127,674 July 1 - 31, 2025 219 $ 74.02 219 $ 111,468 Total 663 663 (1) In August 2023, our Board of Directors authorized the repurchase of up to $350.0 million of our Class A common stock.
Fiscal 2023 Fiscal 2024 Fiscal Quarter: High Low High Low First quarter $ 27.40 $ 15.21 $ 38.92 $ 29.11 Second quarter $ 33.32 $ 25.09 $ 56.94 $ 36.54 Third quarter $ 29.52 $ 23.42 $ 65.98 $ 54.43 Fourth quarter $ 30.55 $ 23.94 $ 73.37 $ 47.91 Holders of Record As of July 31, 2024, there were 51 holders of record of our Class A common stock.
Fiscal 2024 Fiscal 2025 Fiscal Quarter: High Low High Low First quarter $ 38.92 $ 29.11 $ 64.97 $ 46.00 Second quarter $ 56.94 $ 36.54 $ 73.18 $ 61.18 Third quarter $ 65.98 $ 54.43 $ 83.07 $ 58.17 Fourth quarter $ 73.37 $ 47.91 $ 78.34 $ 72.13 Holders of Record As of July 31, 2025, there were 40 holders of record of our Class A common stock.
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In August 2025, our Board of Directors approved a $350.0 million increase to the share repurchase authorization.
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Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item is incorporated herein by reference to the information set forth in Part III, Item 12 of this Annual Report on Form 10-K.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOther Expense, Net Fiscal Year Ended July 31, Change Fiscal Year Ended July 31, Change 2022 2023 $ % 2023 2024 $ % (in thousands, except percentages) Interest income, net $ 4,765 $ 38,427 $ (33,662 ) (706 )% $ 38,427 $ 68,486 $ (30,059 ) (78 )% Change in fair value of derivative liability (198,038 ) — (198,038 ) (100 )% — — — 0 % Amortization of debt discount and issuance costs and interest expense (60,734 ) (64,113 ) 3,379 6 % (64,113 ) (61,503 ) (2,610 ) (4 )% Interest expense related to conversion of 2026 Notes attributable to debt discount and issuance costs — — — 0 % — (107,877 ) 107,877 100 % Debt extinguishment costs (64,911 ) — (64,911 ) (100 )% — — — 0 % Other (1,912 ) (749 ) (1,163 ) (61 )% (749 ) (7,987 ) 7,238 966 % Other (expense) income, net $ (320,830 ) $ (26,435 ) $ (294,395 ) (92 )% $ (26,435 ) $ (108,881 ) $ 82,446 312 % The decrease in other expense, net for fiscal 2023 was due primarily to the fair value of the derivative liability related to the 2026 Notes, which was reclassified to equity during the first quarter of fiscal 2022, debt extinguishment costs resulting from the exchange of $416.5 million in aggregate principal amount of the 2023 Notes for $477.3 million in aggregate principal amount of the 2027 Notes, the $11.0 million gain on our divestiture of Frame Desktop-as-a-Service ("Frame"), and an increase in interest income on our investments. 79 Table of Contents NUTANIX, INC.
Biggest changeOther Expense, Net Fiscal Year Ended July 31, Change 2024 2025 $ % (in thousands, except percentages) Interest income, net $ 68,486 $ 62,310 $ 6,176 9 % Amortization of debt discount and issuance costs and interest expense (61,503 ) (8,378 ) (53,125 ) (86 )% Interest expense related to conversion of 2026 Notes attributable to debt discount and issuance costs (107,877 ) — (107,877 ) 0 % Inducement expense — (11,347 ) 11,347 100 % Other (7,987 ) (3,478 ) (4,509 ) (56 )% Other (expense) income, net $ (108,881 ) $ 39,107 $ (147,988 ) (136 )% The decrease in other expense, net for fiscal 2025 was due primarily to $107.9 million of interest expense recognized during the fiscal quarter ended July 31, 2024 resulting from our conversion of the 2026 Notes, as well as a decrease in interest expense related to our convertible notes, given the conversion of the 2026 Notes.
A subscription-based business model means one in which our products, including associated support and entitlement arrangements, are sold with a defined duration. Subscription-based sales consist of subscription term-based licenses and offerings with ongoing performance obligations, including software entitlement and support subscriptions and cloud-based SaaS offerings.
A subscription-based business model means one in which our products, including associated support and entitlement arrangements, are sold with a defined duration. Subscription-based sales consist of subscription term-based licenses and offerings with ongoing performance obligations, including software entitlement subscriptions, support subscriptions and cloud-based SaaS offerings.
Components of Our Results of Operations Revenue We generate revenue primarily from the sale of our 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.
Components of Our Results of Operations Revenue 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.
Revenue from our software products is generally recognized upon transfer of control to the customer, which is typically upon shipment for sales including a server from a partner, upon making the software available to the customer when not sold with a server, or as services are performed with SaaS offerings.
Revenue from our software products is generally recognized upon transfer of control to the customer, which is typically upon shipment for sales when including a server from a partner, upon making the software available to the customer when not sold with a server, or as services are performed with SaaS offerings.
Support, entitlements and other services revenue — We generate our support, entitlements and other services revenue primarily from software entitlement and support subscriptions, which include the right to software upgrades and enhancements as well as technical support.
Support, entitlements and other services revenue — We generate our support, entitlements and other services revenue primarily from software entitlement 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 entitlement and support subscriptions, with terms ranging from one to five years. Occasionally, we also sell professional services with our products.
The majority of our product sales are sold in conjunction with software entitlement subscriptions and support subscriptions, with terms ranging from one to five years. Occasionally, we also sell professional services with our products.
The transaction price is allocated to the separate performance obligations on a relative standalone selling price ("SSP") basis. For deliverables that we routinely sell separately, such as software entitlement and support subscriptions on our core offerings, we determine SSP by evaluating the standalone sales over the trailing 12 months.
The transaction price is allocated to the separate performance obligations on a relative standalone selling price ("SSP") basis. For deliverables that we routinely sell separately, such as software entitlement subscriptions and support subscriptions on our core offerings, we determine SSP by evaluating the standalone sales over the trailing 12 months.
These accrued liabilities are not reflected in the contractual obligations disclosed in the table above, as it is uncertain if or when such amounts will ultimately be settled. Uncertain tax positions are further discussed in Note 12 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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. Uncertain tax positions are further discussed in Note 12 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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 entitlement and support subscription and services, we focus on expanding our footprint by serving more workloads.
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 entitlement subscriptions, support subscription and services, we focus on expanding our footprint by serving more workloads.
Our presentation of non-GAAP operating income (loss) 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.
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.
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 to support our growth.
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.
Provision for Income Taxes Provision for income taxes consists primarily of income taxes for certain foreign jurisdictions in which we conduct business and state income taxes in the United States.
Provision for Income Taxes 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 define non-GAAP operating income (loss) as operating income (loss) adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, impairment of lease-related assets, litigation settlement accruals and legal fees related to certain non-ordinary course litigation matters, and costs associated with certain other non-recurring transactions.
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.
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. 67 Table of Contents NUTANIX, INC.
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. 72 Table of Contents NUTANIX, INC.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" or in other parts of this Annual Report on Form 10-K. See also "Special Note Regarding Forward-Looking Statements" above. Overview Nutanix, Inc.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" or in other parts of this Annual Report on Form 10-K. See also "Special Note Regarding Forward-Looking Statements" above.
We originally pioneered hyperconverged infrastructure to break down legacy silos by merging compute, storage and networking into a single, easy-to-use, software-defined data center platform. We continued to innovate and developed Nutanix AHV, our native hypervisor that offers enterprise-grade virtualization and built-in Kubernetes support.
We originally pioneered hyperconverged infrastructure ("HCI") to break down legacy silos by merging compute, storage and networking into a single software-defined data center platform. We continued to innovate and developed Nutanix AHV, our native hypervisor that offers enterprise-grade virtualization and built-in Kubernetes support.
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. 70 Table of Contents NUTANIX, INC.
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. 75 Table of Contents NUTANIX, INC.
Recent Accounting Pronouncements Refer to "Recent Accounting Pronouncements" in Note 1 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. 85 Table of Contents
Recent Accounting Pronouncements Refer to "Recent Accounting Pronouncements" in Note 1 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. 89 Table of Contents
Non-GAAP operating income (loss) and Non-GAAP operating margin — We calculate non-GAAP operating margin as non-GAAP operating income (loss) divided by total revenue.
Non-GAAP operating income and Non-GAAP operating margin — We calculate non-GAAP operating margin as non-GAAP operating income divided by total revenue.
More recently, our sales pipeline has evolved to include a higher mix of larger deal opportunities, which often take longer to close and require more levels of review from the customer's executive team, involve greater competition, and have greater variability in timing, outcome and deal structure.
Over time, our sales pipeline has evolved to include a higher mix of larger deal opportunities, which often take longer to close and require more levels of review from the customer's executive team, involve greater competition, and have greater variability in timing, outcome and deal structure.
We have recorded a full valuation allowance related to our federal and state net operating losses and other net deferred tax assets and a partial valuation allowance related to certain foreign net operating losses due to the uncertainty of the ultimate realization of the future benefits of those assets. Beginning in fiscal 2023, provisions in the U.S.
We have recorded a full valuation allowance related to our federal and state net operating losses and other net deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets. Beginning in fiscal 2023, provisions in the U.S.
Nutanix Cloud Platform supports a wide variety of workloads with varied compute, storage, and network requirements, including business-critical applications, data platforms (including SQL and NoSQL databases and business intelligence applications), general-purpose workloads (including system infrastructure, networking, and security), end-user computing and virtual desktop infrastructure services, enterprise artificial intelligence ("AI") workloads (including machine learning and generative AI workloads), and cloud native applications (including modern, containerized applications).
The Nutanix Cloud Platform supports a wide variety of workloads with varied compute, storage, and network requirements, including business-critical applications, data platforms (including SQL, NoSQL, and vector databases and business intelligence applications), 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).
We evaluate these measures because they: • are used by management and our Board of Directors to understand and evaluate our performance and trends, as well as to provide a useful measure for period-to-period comparisons of our core business, particularly as we operate a subscription-based business model; • are widely used as a measure of financial performance to understand and evaluate companies in our industry; and • are used by management to prepare and approve our annual budget and to develop short-term and long-term operational and compensation plans, as well as to assess our actual performance against our goals.
We evaluate these measures because they: • are used by management and our Board of Directors to understand and evaluate our performance and trends, as well as to provide a useful measure for period-to-period comparisons of our core business, particularly as we operate a subscription-based business model; • are widely used as a measure of financial performance to understand and evaluate companies in our industry; and • are used by management to prepare and approve our annual budget and to develop short-term and long-term operational and compensation plans, as well as to assess our actual performance against our goals. 70 Table of Contents NUTANIX, INC.
If one or more holders elect to convert their 2027 Notes, 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.
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.
Non-GAAP Financial Measures and Key Performance Measures We regularly monitor total billings, ACV billings, ARR, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, 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.
Non-GAAP Financial Measures and Key Performance Measures 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), non-GAAP operating margin, 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.
As of July 31, 2024, approximately 76% of our end customers who have been with us for 18 months or longer have made a repeat purchase, which is defined as any purchase activity, including renewals of term-based licenses or software entitlement and support subscription renewals, after the initial purchase.
As of July 31, 2025, approximately 77% of our end customers who have been with us for 18 months or longer have made a repeat purchase, which is defined as any purchase activity, including renewals of term-based licenses or software entitlement subscription and support subscription renewals, after the initial purchase.
We also generate recurring revenue from our software entitlement and support subscription renewals, and given our subscription-focused business model, software and support 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.
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.
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. 65 Table of Contents NUTANIX, INC.
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.
Total billings, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, and free cash flow are not substitutes for total revenue, gross profit, gross margin, operating expenses, operating income (loss), operating margin, or net cash provided by (used in) operating activities, respectively.
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), operating margin, or net cash provided by (used in) operating activities, respectively.
We expect G&A expense, in the long term, to increase in absolute dollars, particularly due to additional legal, accounting, insurance, and other costs associated with our growth, although G&A expense may fluctuate as a percentage of total revenue and on an absolute basis from quarter to quarter.
We expect G&A expense, in the long term, to increase in absolute dollars, particularly due to additional legal, accounting, insurance, and other costs associated with our growth, although G&A expense may fluctuate as a percentage of total revenue and, on an absolute basis, from quarter to quarter. 78 Table of Contents NUTANIX, INC.
Additionally, end customers who have been with us for 18 months or longer have total lifetime orders, including the initial order, in an amount that is more than 8.7x greater, on average, than their initial order.
Additionally, end customers who have been with us for 18 months or longer have total lifetime orders, including the initial order, in an amount that is more than 9.6x greater, on average, than their initial order.
Different assumptions and judgments would change the estimates used in the preparation of our consolidated financial statements, which, in turn, could change the results from those reported. The critical accounting estimates, assumptions and judgments that we believe have the most significant impact on our consolidated financial statements are described below. 83 Table of Contents NUTANIX, INC.
Different assumptions and judgments would change the estimates used in the preparation of our consolidated financial statements, which, in turn, could change the results from those reported. The critical accounting estimates, assumptions and judgments that we believe have the most significant impact on our consolidated financial statements are described below.
These subscription software licenses represented approximately $663.4 million, $825.0 million and $987.8 million of our subscription revenue for fiscal 2022, 2023 and 2024, respectively. Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed.
These subscription software licenses represented approximately $825.0 million, $987.8 million and $1,272.4 million of our subscription revenue for fiscal 2023, 2024 and 2025, respectively. Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed.
Our presentation of non-GAAP gross profit and non-GAAP gross 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. 66 Table of Contents NUTANIX, INC.
Our presentation of non-GAAP gross profit and non-GAAP gross 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.
This includes our newer products outside of our core hyperconverged infrastructure offering, both as compared to traditional data center architectures, as well as the public cloud, particularly as we continue to pursue large enterprises and mission critical workloads. Our business and operating results will be significantly affected by the degree to and speed with which organizations adopt our platform.
This includes our newer solutions that extend beyond our core hyperconverged infrastructure offering, both as compared to traditional data center architectures, as well as the public cloud, particularly as we continue to pursue large enterprises and mission critical workloads. Our business and operating results will be significantly affected by the degree to and speed with which organizations adopt our platform.
There is no GAAP measure that is comparable to ACV billings or ARR, so we have not reconciled either ACV billings or ARR numbers included in this Annual Report on Form 10-K to any GAAP measure.
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.
Other non-subscription product revenue — Other non-subscription product revenue includes approximately $49.7 million, $37.4 million and $27.9 million of non-portable software revenue for fiscal 2022, 2023 and 2024, respectively, and approximately $5.6 million, $2.8 million and $3.3 million of hardware revenue for fiscal 2022, 2023 and 2024, respectively. • Non-portable software revenue — Non-portable software revenue includes sales of our platform when delivered on a configured-to-order server by us or one of our OEM partners.
Other non-subscription product revenue — Other non-subscription product revenue includes approximately $37.4 million, $27.9 million and $10.8 million of non-portable software revenue for fiscal 2023, 2024 and 2025, respectively, and approximately $2.8 million, $3.3 million and $4.2 million of hardware revenue for fiscal 2023, 2024 and 2025, respectively. • Non-portable software revenue — Non-portable software revenue includes sales of our platform when delivered on a configured-to-order server by us or one of our OEM partners.
Market Adoption of Our Products Hybrid and multicloud paradigms, as well as trends in generative AI and modern applications, have affected IT buyer expectations about the simplicity, agility, scalability, portability, and pay-as-you-grow economics of IT resources. A key focus of our sales and marketing efforts is creating market awareness about the benefits of our platform.
Market Adoption of Our Products Hybrid and multicloud architectures, as well as trends in enterprise AI and modern containerized applications, have affected IT buyer expectations around the simplicity, agility, scalability, portability, and pay-as-you-grow economics of IT resources. A key focus of our sales and marketing efforts is creating market awareness of the benefits of our platform.
Judgment is required in assessing the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our consolidated financial statements.
Judgment is required in assessing the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our consolidated financial statements. 88 Table of Contents NUTANIX, INC.
We recognize revenue from software entitlement 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.
We recognize revenue from software entitlement 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. 77 Table of Contents NUTANIX, INC.
Net cash used in financing activities of $1.1 billion for fiscal 2024 consisted of $817.6 million used to pay the cash portion of the obligation due upon conversion of the 2026 Notes, $161.6 million of taxes paid related to the net share settlement of equity awards, $131.1 million of repurchases of our Class A common stock, and $3.9 million of payments for finance lease obligations, partially offset by $51.6 million of proceeds from the sale of shares through employee equity incentive plans. 82 Table of Contents NUTANIX, INC.
Cash Flows from Financing Activities Net cash used in financing activities of approximately $1,062.6 million for fiscal 2024 included approximately $817.6 million used to pay the cash portion of the obligation due upon conversion of the 2026 Notes, $161.6 million of taxes paid related to the net share settlement of equity awards, $131.1 million of repurchases of our Class A common stock, and $3.9 million of payments for finance lease obligations, partially offset by approximately $51.6 million of proceeds from the sale of shares through employee equity incentive plans.
Revenue from software entitlement and support subscription and cloud-based SaaS offerings is recognized ratably over the contractual service period. Accordingly, any decline in new or renewed subscriptions in any one fiscal quarter may not be fully or immediately reflected in our revenue for that fiscal quarter.
Revenue from software entitlement 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.
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 July 31, 2024, we had accounts receivable of $229.8 million, net of allowances of $0.8 million.
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 July 31, 2025, we had accounts receivable of approximately $338.0 million, net of allowances of $2.2 million.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Fiscal Year Ended July 31, 2022 2023 2024 (as a percentage of total revenue) Revenue: Product 47.9 % 49.0 % 49.7 % Support, entitlements and other services 52.1 % 51.0 % 50.3 % Total revenue 100.0 % 100.0 % 100.0 % Cost of revenue: Product 3.5 % 2.7 % 1.7 % Support, entitlements and other services 16.8 % 15.1 % 13.4 % Total cost of revenue 20.3 % 17.8 % 15.1 % Gross profit 79.7 % 82.2 % 84.9 % Operating expenses: Sales and marketing 61.9 % 49.6 % 45.5 % Research and development 36.2 % 31.2 % 29.7 % General and administrative 10.5 % 12.5 % 9.3 % Total operating expenses 108.6 % 93.3 % 84.5 % (Loss) income from operations (28.9 )% (11.1 )% 0.4 % Other expense, net (20.3 )% (1.4 )% (5.1 )% Loss before provision for income taxes (49.2 )% (12.5 )% (4.7 )% Provision for income taxes 1.2 % 1.1 % 1.1 % Net loss (50.4 )% (13.6 )% (5.8 )% 75 Table of Contents NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Fiscal Year Ended July 31, 2023 2024 2025 (as a percentage of total revenue) Revenue: Product 49.0 % 49.7 % 52.9 % Support, entitlements and other services 51.0 % 50.3 % 47.1 % Total revenue 100.0 % 100.0 % 100.0 % Cost of revenue: Product 2.7 % 1.7 % 1.1 % Support, entitlements and other services 15.1 % 13.4 % 12.1 % Total cost of revenue 17.8 % 15.1 % 13.2 % Gross profit 82.2 % 84.9 % 86.8 % Operating expenses: Sales and marketing 49.6 % 45.5 % 41.6 % Research and development 31.2 % 29.7 % 29.0 % General and administrative 12.5 % 9.3 % 9.4 % Total operating expenses 93.3 % 84.5 % 80.0 % (Loss) income from operations (11.1 )% 0.4 % 6.8 % Other (expense) income, net (1.4 )% (5.1 )% 1.5 % (Loss) income before provision for income taxes (12.5 )% (4.7 )% 8.3 % Provision for income taxes 1.1 % 1.1 % 0.9 % Net (loss) income (13.6 )% (5.8 )% 7.4 % 81 Table of Contents NUTANIX, INC.
Our future cash needs will depend on many factors, including our growth strategy and plans, the timing and extent of spending to support development 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, and market, economic and financial conditions (including inflation and interest rates).
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).
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Revenue Recognition Some of our contracts with customers contain multiple performance obligations. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For these contracts, we account for individual performance obligations separately if they are distinct.
Revenue Recognition Some of our contracts with customers contain multiple performance obligations. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For these contracts, we account for individual performance obligations separately if they are distinct.
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 1.7 percentage points and 2.2 percentage points in fiscal 2023 and fiscal 2024, respectively, due primarily to product revenue increasing while cost of product revenue decreases .
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 1.3 percentage points in fiscal 2025 due primarily to product revenue increasing while cost of product revenue decreases.
For more information on the share repurchase program, refer to Note 8 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
For more information on the share repurchase, refer to Note 8 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. 86 Table of Contents NUTANIX, INC.
Stock-Based Compensation We measure and recognize compensation expense for all stock-based awards, including stock options and purchase rights issued to employees under our 2016 Employee Stock Purchase Plan ("2016 ESPP"), based on the estimated fair value of the awards on the grant date.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Stock-Based Compensation We measure and recognize compensation expense for all stock-based awards, including stock options and purchase rights issued to employees under our 2016 Employee Stock Purchase Plan ("2016 ESPP"), based on the estimated fair value of the awards on the grant date.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Non-GAAP operating expenses — We define non-GAAP operating expenses as total operating expenses adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, impairment of lease-related assets, litigation settlement accruals and legal fees related to certain non-ordinary course litigation matters, and costs associated with certain other non-recurring transactions.
Non-GAAP operating expenses — We define non-GAAP operating expenses as total operating expenses 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.
A majority of our product revenue is generated from the sale of our Nutanix Cloud Platform. We also sell renewals of previously purchased software licenses and SaaS offerings.
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.
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.
The total average contract duration was approximately 3.0 years and 3.1 years for fiscal 2024 and 2025, 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.
Non-GAAP gross profit and Non-GAAP gross margin — We calculate non-GAAP gross margin as non-GAAP gross profit divided by total revenue. We define non-GAAP gross profit as gross profit adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, impairment of lease-related assets, and costs associated with certain other non-recurring transactions.
We define non-GAAP gross profit as gross profit adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, and costs associated with certain other non-recurring transactions.
Tax Cuts and Jobs Act of 2017 required us to capitalize and amortize R&D expenditures rather than deducting the costs as incurred. The capitalization of R&D resulted in U.S. taxable income for the fiscal 2024, which was offset by net operating loss carryforwards. 73 Table of Contents NUTANIX, INC.
Tax Cuts and Jobs Act of 2017 required us to capitalize and amortize research and experimental ("R&E") expenditures rather than deducting the costs as incurred. The capitalization of R&E resulted in U.S. taxable income for fiscal 2025, which was partially offset by net operating loss carryforwards.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) We believe that our cash, cash equivalents and short-term investments and our expected net cash provided by operating activities will be sufficient to meet our anticipated cash needs for working capital, capital expenditures, and share repurchases (if any) for at least the next 12 months.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 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 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 servicing and repayment requirements for at least the next 12 months.
Our Nutanix Cloud Platform is designed to enable organizations to build a hybrid multicloud infrastructure, providing a consistent cloud operating model with a single platform for running applications and managing data in core data centers, at the edge, and in public clouds, all while supporting a variety of hypervisors and container platforms.
The Nutanix Cloud Platform is designed to enable organizations to build hybrid multicloud infrastructure, providing a consistent cloud operating model with a single platform for running applications and managing data in core data centers, at the edge, and in public clouds, while supporting customer choice across server platforms, storage options, public and managed clouds, and container and virtualization platforms.
Other Income (Expense), Net 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") and our outstanding 0.25% convertible senior notes due 2027 (the "2027 Notes"), changes in the fair value of the derivative liability associated with the 2026 Notes, non-cash interest expense on the 2026 Notes, the amortization of the debt discount on the 2026 Notes, interest expense related to the conversion of the 2026 Notes in full, interest expense on the 2027 Notes, debt extinguishment costs, interest income related to our short-term investments, and foreign currency exchange gains or losses.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Other Income (Expense), Net 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"), 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 and 2029 Notes, inducement expense related to the partial repurchase of the 2027 Notes, interest income related to our short-term investments, and foreign currency exchange gains or losses.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Net cash provided by investing activities of $529.6 million for fiscal 2024 consisted of $774.2 million of maturities of short-term investments and $706.4 million of sales of short-term investments, partially offset by $871.3 million of short-term investment purchases, $75.3 million of purchases of property and equipment, and $4.5 million of cash paid for acquisitions.
Cash Flows from Investing Activities Net cash provided by investing activities of approximately $529.6 million for fiscal 2024 included approximately $774.2 million of maturities of short-term investments and $706.4 million of sales of short-term investments, partially offset by approximately $871.3 million of short-term investment purchases, $75.3 million of purchases of property and equipment, and $4.5 million of cash paid for acquisitions.
To provide our customers with more choice, we further engineered our software solutions to run on a variety of server platforms, decoupling our software from Nutanix-branded hardware appliances and powering a variety of on-premises private cloud deployments, as part of our previously-completed transition from a hardware company to a software company.
To provide our customers with more choice, we further engineered our software solutions to run on a variety of server platforms and with a variety of external storage providers, decoupling our software from the underlying hardware and powering a variety of hybrid multi cloud deployments, as part of our previously-completed transition from a hardware company to a software company.
We believe that these investments will contribute to our long-term growth, although they may adversely affect our profitability in the near term. 69 Table of Contents NUTANIX, INC.
We believe that these investments will support our long-term growth strategy, although they may result in increased expenses and adversely affect our profitability in the near term. 74 Table of Contents NUTANIX, INC.
For additional information regarding our convertible senior notes, refer to Note 5 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
For additional information regarding our debt offerings, see Note 5 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. 85 Table of Contents NUTANIX, INC.
To provide our customers with the flexibility to choose their preferred license levels and durations based on their specific business needs, we reshaped our licensing by completing a transition to a subscription-based business model.
Most recently, we have extended our software platform support to include external storage from qualified partners. To provide our customers with the flexibility to choose their preferred license levels and durations based on their specific business needs, we reshaped our licensing by completing a transition to a subscription-based business model.
Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP.
In addition to making hybrid multicloud deployments simple, we have a further long-term vision to enable developers to build modern container-based applications once and run them anywhere through Project Beacon, our multi-year effort to provide consistent Kubernetes platform management and data-centric platform services across clouds. Our business is organized into a single operating and reportable segment.
In addition to enabling enterprise AI and simplifying hybrid multicloud deployments, we have a further long-term vision to enable developers to build modern container-based applications once and run them anywhere through Project Beacon, our multi-year effort to provide consistent Kubernetes platform management and data-centric platform services across clouds. 67 Table of Contents NUTANIX, INC.
These measures include improving the efficiency of our demand generation spend, focusing on lower cost renewals, increasing leverage of our channel partners and OEMs, including supporting new OEMs, and optimizing headcount in geographies based on market opportunities.
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 optimizing headcount in geographies based on market opportunities.
Cost of support, entitlements and other services revenue Cost of support, entitlements and other services revenue increased year-over-year for both fiscal 2023 and fiscal 2024 due primarily to higher personnel-related costs, resulting from growth in our global customer support organization. Higher outside services costs also contributed to the increase for fiscal 2024.
Cost of support, entitlements and other services revenue Cost of support, entitlements and other services revenue increased year-over-year for fiscal 2025 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 bonus expense.
Support, entitlements and other services gross margin increased by 2.7 percentage points and 3.0 percentage points fiscal 2023 and in fiscal 2024, respectively, due primarily to support, entitlements and other services revenue growing at a higher rate than personnel-related costs. 77 Table of Contents NUTANIX, INC.
Support, entitlements and other services gross margin increased by 1.0 percentage points in fiscal 2025 due primarily to support, entitlements and other services revenue growing at a higher rate than personnel-related costs.
Our platform typically includes one or more years of support and entitlements, 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.
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, 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.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The following table presents a reconciliation of total billings, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, and free cash flow to the most directly comparable GAAP financial measures, for each of the periods indicated: Fiscal Year Ended July 31, 2022 2023 2024 (in thousands, except percentages) Total revenue $ 1,580,796 $ 1,862,895 $ 2,148,816 Change in deferred revenue 127,845 142,687 258,940 Total billings (non-GAAP) $ 1,708,641 $ 2,005,582 $ 2,407,756 Gross profit $ 1,259,640 $ 1,530,708 $ 1,824,704 Stock-based compensation 38,225 34,577 34,107 Amortization of intangible assets 13,579 9,870 3,392 Restructuring charges 218 230 — Non-GAAP gross profit $ 1,311,662 $ 1,575,385 $ 1,862,203 Gross margin 79.7 % 82.2 % 84.9 % Stock-based compensation 2.4 % 1.9 % 1.6 % Amortization of intangible assets 0.9 % 0.5 % 0.2 % Restructuring charges — — — Non-GAAP gross margin 83.0 % 84.6 % 86.7 % Operating expenses $ 1,718,492 $ 1,737,858 $ 1,817,141 Stock-based compensation (305,021 ) (277,168 ) (299,726 ) Amortization of intangible assets (2,604 ) (827 ) (317 ) Restructuring (charges) reversals (10,957 ) (5,073 ) 194 Early exit of lease-related assets (597 ) (1,726 ) — Litigation settlement accrual and legal fees (432 ) (38,675 ) (1,971 ) Other — — (225 ) Non-GAAP operating expenses $ 1,398,881 $ 1,414,389 $ 1,515,096 (Loss) income from operations $ (458,852 ) $ (207,150 ) $ 7,563 Stock-based compensation 343,246 311,745 333,833 Amortization of intangible assets 16,183 10,697 3,709 Restructuring charges (reversals) 11,175 5,303 (194 ) Early exit of lease-related assets 597 1,726 — Litigation settlement accrual and legal fees 432 38,675 1,971 Other — — 225 Non-GAAP (loss) income from operations $ (87,219 ) $ 160,996 $ 347,107 Operating margin (29.0 )% (11.1 )% 0.4 % Stock-based compensation 21.8 % 16.6 % 15.5 % Amortization of intangible assets 1.0 % 0.6 % 0.2 % Restructuring charges (reversals) 0.7 % 0.3 % — Early exit of lease-related assets — 0.1 % — Litigation settlement accrual and legal fees — 2.1 % 0.1 % Other — — — Non-GAAP operating margin (5.5 )% 8.6 % 16.2 % Net cash provided by operating activities $ 67,543 $ 272,403 $ 672,931 Purchases of property and equipment (49,058 ) (65,404 ) (75,252 ) Free cash flow (non-GAAP) $ 18,485 $ 206,999 $ 597,679 68 Table of Contents NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The following table presents a reconciliation of non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, and free cash flow to the most directly comparable GAAP financial measures, for each of the periods indicated: Fiscal Year Ended July 31, 2023 2024 2025 (in thousands, except percentages) Gross profit $ 1,530,708 $ 1,824,704 $ 2,203,145 Stock-based compensation 34,577 34,107 30,406 Amortization of intangible assets 9,870 3,392 2,185 Restructuring charges 230 — — Non-GAAP gross profit $ 1,575,385 $ 1,862,203 $ 2,235,736 Gross margin 82.2 % 84.9 % 86.8 % Stock-based compensation 1.9 % 1.6 % 1.2 % Amortization of intangible assets 0.5 % 0.2 % 0.1 % Restructuring charges — — — Non-GAAP gross margin 84.6 % 86.7 % 88.1 % Operating expenses $ 1,737,858 $ 1,817,141 $ 2,030,604 Stock-based compensation (277,168 ) (299,726 ) (321,184 ) Amortization of intangible assets (827 ) (317 ) (353 ) Restructuring (charges) reversals (5,073 ) 194 — Early exit of lease-related assets (1,726 ) — — Litigation settlement accrual and legal fees (38,675 ) (1,971 ) (9,451 ) Other — (225 ) — Non-GAAP operating expenses $ 1,414,389 $ 1,515,096 $ 1,699,616 Operating (loss) income $ (207,150 ) $ 7,563 $ 172,541 Stock-based compensation 311,745 333,833 351,590 Amortization of intangible assets 10,697 3,709 2,538 Restructuring charges (reversals) 5,303 (194 ) — Early exit of lease-related assets 1,726 — — Litigation settlement accrual and legal fees 38,675 1,971 9,451 Other — 225 — Non-GAAP operating income $ 160,996 $ 347,107 $ 536,120 Operating margin (11.1 )% 0.4 % 6.8 % Stock-based compensation 16.6 % 15.5 % 13.8 % Amortization of intangible assets 0.6 % 0.2 % 0.1 % Restructuring charges (reversals) 0.3 % — — Early exit of lease-related assets 0.1 % — — Litigation settlement accrual and legal fees 2.1 % 0.1 % 0.4 % Other — — — Non-GAAP operating margin 8.6 % 16.2 % 21.1 % Net cash provided by operating activities $ 272,403 $ 672,931 $ 821,456 Purchases of property and equipment (65,404 ) (75,252 ) (71,283 ) Free cash flow (non-GAAP) $ 206,999 $ 597,679 $ 750,173 73 Table of Contents NUTANIX, INC.
Cost of Revenue Cost of product revenue — Cost of product revenue consists of costs paid to OEM partners, hardware costs, personnel costs associated with our operations function, consisting of salaries, benefits, bonuses, and stock-based compensation, cloud-based costs associated with our SaaS offerings, and allocated costs, consisting of certain facilities, depreciation and amortization, recruiting, and information technology costs, allocated based on headcount.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Cost of Revenue Cost of product revenue — Cost of product revenue consists of costs paid to OEM partners, hardware costs, personnel costs associated with our operations function, consisting of salaries, benefits, bonuses, and stock-based compensation, cloud-based costs associated with our SaaS offerings, and allocated costs.
Fiscal Year Ended July 31, 2022 2023 2024 (in thousands) Revenue: Product $ 757,623 $ 912,114 $ 1,067,948 Support, entitlements and other services 823,173 950,781 1,080,868 Total revenue 1,580,796 1,862,895 2,148,816 Cost of revenue: Product (1)(2) 55,602 51,107 36,441 Support, entitlements and other services (1) 265,554 281,080 287,671 Total cost of revenue 321,156 332,187 324,112 Gross profit 1,259,640 1,530,708 1,824,704 Operating expenses: Sales and marketing (1)(2) 979,075 924,696 977,286 Research and development (1) 572,999 580,961 638,992 General and administrative (1) 166,418 232,201 200,863 Total operating expenses 1,718,492 1,737,858 1,817,141 (Loss) income from operations (458,852 ) (207,150 ) 7,563 Other expense, net (320,830 ) (26,435 ) (108,881 ) Loss before provision for income taxes (779,682 ) (233,585 ) (101,318 ) Provision for income taxes 19,264 20,975 23,457 Net loss $ (798,946 ) $ (254,560 ) $ (124,775 ) (1) Includes stock-based compensation expense as follows: Product cost of revenue $ 7,379 $ 7,966 $ 6,822 Support, entitlements and other services cost of revenue 30,846 26,611 27,285 Sales and marketing 104,592 82,758 80,190 Research and development 143,759 139,073 156,784 General and administrative 56,670 55,337 62,752 Total stock-based compensation expense $ 343,246 $ 311,745 $ 333,833 (2) Includes amortization of intangible assets as follows: Product cost of revenue $ 13,579 $ 9,870 $ 3,392 Sales and marketing 2,604 827 317 Total amortization of intangible assets $ 16,183 $ 10,697 $ 3,709 74 Table of Contents NUTANIX, INC.
Fiscal Year Ended July 31, 2023 2024 2025 (in thousands) Revenue: Product $ 912,114 $ 1,067,948 $ 1,341,374 Support, entitlements and other services 950,781 1,080,868 1,196,553 Total revenue 1,862,895 2,148,816 2,537,927 Cost of revenue: Product (1)(2) 51,107 36,441 28,341 Support, entitlements and other services (1) 281,080 287,671 306,441 Total cost of revenue 332,187 324,112 334,782 Gross profit 1,530,708 1,824,704 2,203,145 Operating expenses: Sales and marketing (1)(2) 924,696 977,286 1,056,465 Research and development (1) 580,961 638,992 736,823 General and administrative (1) 232,201 200,863 237,316 Total operating expenses 1,737,858 1,817,141 2,030,604 (Loss) income from operations (207,150 ) 7,563 172,541 Other (expense) income, net (26,435 ) (108,881 ) 39,107 (Loss) income before provision for income taxes (233,585 ) (101,318 ) 211,648 Provision for income taxes 20,975 23,457 23,282 Net (loss) income $ (254,560 ) $ (124,775 ) $ 188,366 (1) Includes stock-based compensation expense as follows: Product cost of revenue $ 7,966 $ 6,822 $ 2,824 Support, entitlements and other services cost of revenue 26,611 27,285 27,582 Sales and marketing 82,758 80,190 80,930 Research and development 139,073 156,784 175,361 General and administrative 55,337 62,752 64,893 Total stock-based compensation expense $ 311,745 $ 333,833 $ 351,590 (2) Includes amortization of intangible assets as follows: Product cost of revenue $ 9,870 $ 3,392 $ 2,185 Sales and marketing 827 317 353 Total amortization of intangible assets $ 10,697 $ 3,709 $ 2,538 80 Table of Contents NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The fair value of stock options and RSUs with a service condition is recognized as expense on a straight-line basis over the requisite service period, which is generally four years.
The fair value of awards with a market-based condition is measured using a Monte Carlo simulation. The fair value of stock options and RSUs with a service condition is recognized as expense on a straight-line basis over the requisite service period, which is generally four years.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 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.
Personnel costs consist of wages, benefits, bonuses and, with respect to sales and marketing expenses, sales commissions. 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.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Total billings, ACV billings, ARR, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, and free cash flow 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 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.
Key Financial and Performance Metrics We monitor the following key financial and performance metrics: As of and for the Fiscal Year Ended July 31, 2022 2023 2024 (in thousands, except percentages and end customer count) Total revenue $ 1,580,796 $ 1,862,895 $ 2,148,816 Year-over-year percentage increase 13.4 % 17.8 % 15.3 % Total billings $ 1,708,641 $ 2,005,582 $ 2,407,756 Annual contract value ("ACV") billings $ 756,326 $ 956,810 $ 1,162,428 Annual recurring revenue ("ARR") $ 1,202,438 $ 1,561,981 $ 1,907,982 Gross profit $ 1,259,640 $ 1,530,708 $ 1,824,704 Non-GAAP gross profit $ 1,311,662 $ 1,575,385 $ 1,862,203 Gross margin 79.7 % 82.2 % 84.9 % Non-GAAP gross margin 83.0 % 84.6 % 86.7 % Operating expenses $ 1,718,492 $ 1,737,858 $ 1,817,141 Non-GAAP operating expenses $ 1,398,881 $ 1,414,389 $ 1,515,096 Operating (loss) income $ (458,852 ) $ (207,150 ) $ 7,563 Non-GAAP operating (loss) income $ (87,219 ) $ 160,996 $ 347,107 Operating margin (29.0 )% (11.1 )% 0.4 % Non-GAAP operating margin (5.5 )% 8.6 % 16.2 % Net cash provided by operating activities $ 67,543 $ 272,403 $ 672,931 Free cash flow $ 18,485 $ 206,999 $ 597,679 Total end customers (1) 22,600 24,550 26,530 (1) The total end customer count reflects standard adjustments/consolidation to certain customer accounts within our system of record and is rounded to the nearest 10. 63 Table of Contents NUTANIX, INC.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Key Financial and Performance Metrics We monitor the following key financial and performance metrics: As of and for the Fiscal Year Ended July 31, 2023 2024 2025 (in thousands, except percentages and end customer count) Total revenue $ 1,862,895 $ 2,148,816 $ 2,537,927 Year-over-year percentage increase 18 % 15 % 18 % Annual recurring revenue ("ARR") $ 1,561,981 $ 1,907,982 $ 2,223,197 Gross profit $ 1,530,708 $ 1,824,704 $ 2,203,145 Non-GAAP gross profit $ 1,575,385 $ 1,862,203 $ 2,235,736 Gross margin 82.2 % 84.9 % 86.8 % Non-GAAP gross margin 84.6 % 86.7 % 88.1 % Operating expenses $ 1,737,858 $ 1,817,141 $ 2,030,604 Non-GAAP operating expenses $ 1,414,389 $ 1,515,096 $ 1,699,616 Operating (loss) income $ (207,150 ) $ 7,563 $ 172,541 Non-GAAP operating income $ 160,996 $ 347,107 $ 536,120 Operating margin (11.1 )% 0.4 % 6.8 % Non-GAAP operating margin 8.6 % 16.2 % 21.1 % Net cash provided by operating activities $ 272,403 $ 672,931 $ 821,456 Free cash flow $ 206,999 $ 597,679 $ 750,173 Total end customers (1) 24,550 26,530 29,290 (1) The total end customer count reflects standard adjustments/consolidation to certain customer accounts within our system of record and is rounded to the nearest 10.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) • Hardware revenue — In the infrequent transactions where the hardware platform is purchased directly from Nutanix, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis.
Revenue from our non-portable software products is generally recognized upon transfer of control to the customer. • Hardware revenue — In the infrequent transactions where the hardware platform is purchased directly from Nutanix, we consider ourselves to be the principal in the transaction and we record revenue and costs of goods sold on a gross basis.
We continue to maintain a full valuation allowance on our U.S. federal and state deferred tax assets and a partial valuation allowance related to certain foreign net operating losses. Liquidity and Capital Resources Our principal sources of liquidity were cash, cash equivalents and marketable securities and net accounts receivable.
We continue to maintain a full valuation allowance on our U.S. federal and state deferred tax assets. 84 Table of Contents NUTANIX, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Liquidity and Capital Resources Our principal sources of liquidity are cash, cash equivalents and marketable securities and net accounts receivable.
Investment in Profitable Growth We continue to invest in our growth over the long run, while improving our operating cash flow performance by focusing on creating operational efficiencies throughout our organization, including go-to-market efficiencies, particularly by generating leverage through partnerships. By maintaining this balance, we believe we can sustain profitable growth.
Investment in Profitable Growth We plan to continue investing in initiatives that support our long-term growth, while also focusing on improving our operating cash flow through operational efficiencies, including in our go-to-market functions. By maintaining this balance, we believe we can sustain profitable growth.
Cash Flows from Investing Activities Net cash used in investing activities of $54.2 million for fiscal 2022 consisted of $1.1 billion of short-term investment purchases and $49.1 million of purchases of property and equipment, partially offset by $1.1 billion of maturities of short-term investments and $18.0 million of sales of short-term investments.
Net cash used in investing activities of approximately $951.7 million for fiscal 2025 included approximately $1,359.6 million of short-term investment purchases and $71.3 million of purchases of property and equipment, partially offset by $476.2 million of maturities of short-term investments and $3.0 million of sales of short-term investments.
The software licenses associated with these sales are typically non-portable and can be used over the life of the server on which the software is delivered. Revenue from our non-portable software products is generally recognized upon transfer of control to the customer. 64 Table of Contents NUTANIX, INC.
The software licenses associated with these sales are typically non-portable and can be used over the life of the server on which the software is delivered.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur expenses are generally denominated in the currencies of the countries where our operations are located. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative instruments.
Biggest changeOur expenses are generally denominated in the currencies of the countries where our operations are located. To date, we have not undertaken any hedging transactions related to foreign currency exposure, but we may do so in the future if our exposure to foreign currency should become more significant.
A hypothetical 10% decrease in the U.S. dollar against other currencies would result in an increase in our operating loss of approximately $58.5 million, $60.8 million and $70.4 million for fiscal 2022, 2023 and 2024, respectively. The increase in this hypothetical change in fiscal 2024 is due to an increase in our expenses denominated in foreign currencies.
A hypothetical 10% decrease in the U.S. dollar against other currencies would result in an increase in our operating loss of approximately $60.8 million, $70.4 million and $77.7 million for fiscal 2023, 2024 and 2025, respectively. The increase in this hypothetical change in fiscal 2025 is due to an increase in our expenses denominated in foreign currencies.
Due to the short-term nature of our investment portfolio, we do not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair market value of our portfolio.
Due to the short-term nature of our investment portfolio, we do not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair market value of our portfolio. Therefore, we do not expect our operating results or cash flows to be materially affected by any sudden change in interest rates.
In the event our foreign sales and expenses increase, our operating results may be more significantly affected by foreign currency exchange rate fluctuations, which can affect our operating income or loss.
As our international operations grow, we will continue to reassess our approach to manage our risk relating to fluctuations in currency rates. In the event our foreign sales and expenses increase, our operating results may be more significantly affected by foreign currency exchange rate fluctuations, which can affect our operating income or loss.
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Therefore, we do not expect our operating results or cash flows to be materially affected by any sudden change in interest rates. 86 Table of Contents
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On February 12, 2025, we entered into the Revolver, which 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.
Added
At our option, and subject to certain conditions, any borrowings under the Revolver bear interest at a variable rate tied to a base rate, a term Secured Overnight Financing Rate or an alternative currency term rate, plus, in each case, an applicable margin based on our total leverage ratio.
Added
Consequently, our interest expense could fluctuate as a result of the variable interest rates applicable to any borrowings under the Revolver.
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As of July 31, 2025, we had no borrowings and an immaterial amount of letters of credit outstanding under the Revolver. 90 Table of Contents As of July 31, 2025, we had outstanding $500.0 million aggregate principal amount of 2027 Notes and $862.5 million aggregate principal amount of 2029 Notes.
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The 2027 Notes and the 2029 Notes are not recorded at fair value but are measured at fair value on a quarterly basis for disclosure purposes. See Note 3 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Added
The 2027 Notes and the 2029 Notes have a fixed annual interest rate and therefore we have no economic exposure to changes in interest rates. However, the fair value of the 2027 Notes and the 2029 Notes is affected by interest rates.
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Generally, the fair value of the 2027 Notes and the 2029 Notes will increase as interest rates decrease and decrease as interest rates increase. In addition, the fair values of the 2027 Notes and the 2029 Notes are affected by the price of our Class A common stock.
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The fair value of the 2027 Notes and the 2029 Notes will generally increase as the price of our Class A common stock increases and will generally decrease as the price of our Class A common stock decreases. 91 Table of Contents

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