Nutanix — Income Statement, Cash Flows & Balance Sheet
Is Nutanix profitable?
Nutanix crossed into meaningful operating profitability, though a massive one-time tax benefit made the headline net income figure extraordinary.
| Metric | FY2024 | FY2025 | FY2026 | Change (FY25→FY26) |
|---|---|---|---|---|
| Total Revenue ($M) | $2,149 | $2,538 | $2,854 | +12% |
| Gross Profit Margin | 84.9% | 86.8% | 86.8% | Flat |
| Operating Income ($M) | $8 | $173 | $274 | +59% |
| Operating Margin | 0.4% | 6.8% | 9.6% | +2.8 pp |
| Net Income ($M) | $(125) | $188 | $1,507 | +700% |
Revenue is growing steadily and Nutanix is converting more of each dollar to profit — operating margins nearly doubled year-over-year on the strength of its high-margin subscription software model. However, the enormous reported net income is almost entirely explained by a roughly $1.2 billion non-cash tax benefit (GAAP), stemming from the release of a "valuation allowance" — essentially accounting recognition that prior years' accumulated tax assets are now likely usable. Stripping that out, underlying profitability is improving but still modest relative to revenue.
A one-time tax accounting event — not operating performance — drove the reported net income spike.
| Item | FY2026 |
|---|---|
| Income before taxes ($M) | $327 |
| Tax benefit from valuation allowance release ($M) | ~$1,194 |
| Total tax benefit ($M) | $1,180 |
| Reported net income ($M) | $1,507 |
Nutanix had accumulated large deferred tax assets (past losses stored as future tax credits) but had been discounting their value with a valuation allowance. Now that Nutanix is consistently profitable, it recognised those assets as usable — a large one-time non-cash benefit. This does not represent cash received and will not repeat.
Where does Nutanix's revenue come from?
Nutanix is overwhelmingly a subscription software business, with geography diversifying meaningfully.
| Revenue Stream | FY2025 | FY2026 | Change |
|---|---|---|---|
| Subscription ($M) | $2,411 | $2,712 | +12% |
| Professional Services & Other ($M) | $127 | $141 | +11% |
| United States ($M) | $1,409 | $1,530 | +9% |
| EMEA ($M) | $686 | $831 | +21% |
| Asia Pacific ($M) | $393 | $418 | +6% |
Subscriptions represent roughly 95% of total revenue, providing high revenue predictability. International markets — particularly Europe, the Middle East and Africa — are growing faster than the U.S., reducing concentration risk over time.
Does Nutanix generate cash?
Nutanix generates strong and growing operating cash flow, well ahead of reported operating income.
| Metric | FY2024 | FY2025 | FY2026 | Change (FY25→FY26) |
|---|---|---|---|---|
| Operating Cash Flow ($M) | $673 | $821 | $917 | +12% |
| Capital Expenditures ($M) | $(75) | $(71) | $(76) | ~Flat |
| Free Cash Flow ($M) | $598 | $750 | $841 | +12% |
Operating cash flow substantially exceeds GAAP operating income each year, primarily because deferred revenue — customers paying upfront for multi-year subscriptions — acts as a reliable cash engine. Free cash flow (operating cash flow minus capex, a non-GAAP measure) grew solidly and provides room for capital returns. Nutanix spent $484 million buying back its own shares in FY2026.
How strong is Nutanix's balance sheet?
Nutanix flipped from a stockholders' deficit to positive equity, but carries significant convertible debt.
| Item | July 31, 2025 | July 31, 2026 | Change |
|---|---|---|---|
| Cash & Short-Term Investments ($M) | $1,993 | $2,361 | +$369M |
| Convertible Notes, net ($M) | $1,344 | $1,349 | ~Flat |
| Total Stockholders' (Deficit) Equity ($M) | $(695) | $703 | +$1,397M |
| Deferred Revenue (total) ($M) | $2,113 | $2,423 | +$310M |
The swing to positive equity was driven primarily by the tax asset recognition discussed above. Liquidity is strong — cash and investments cover the entire debt load. Growing deferred revenue signals healthy future revenue visibility. The $1.4 billion in convertible notes (due 2027 and 2029) is a real obligation to watch, though Nutanix has ample liquidity to manage it.