The hybrid cloud company experiences a 22% increase in revenue and an 18% rise in ARR, with strong cash generation and rising operational profitability.
Nutanix, Inc. (NASDAQ: NTNX) announced its financial results for the third quarter of fiscal year 2025, which ended on April 30, on May 28. The tech firm surpassed its own forecasts, showing notable growth across all key metrics, including an 18% year-over-year increase in annual recurring revenue (ARR) and free cash flow of $203.4 million, more than double that of the same period last year.
Rajiv Ramaswami, President and CEO, emphasized that “the strong results reflect the strength of the Nutanix Cloud Platform and the confidence of businesses seeking a long-term technology partner.” The company continues to invest in innovation around external storage, modern applications, and generative artificial intelligence—key areas for its future expansion.
Q3 FY25 Financial Results
| Key Metric | Q3 FY25 | Q3 FY24 | Year-over-Year Change |
|---|---|---|---|
| Total Revenue | $638.98M | $524.58M | +22% |
| Annual Recurring Revenue (ARR) | $2.142.97B | $1.820.21B | +18% |
| Average Contract Length | 3.1 years | 3.0 years | +0.1 years |
| GAAP Gross Margin | 87.0% | 84.8% | +220 bps |
| Non-GAAP Gross Margin | 88.2% | 86.5% | +170 bps |
| GAAP Operating Income | $48.6M | -$11.6M | +60.2M |
| Non-GAAP Operating Income | $137.1M | $73.3M | +63.8M |
| Operating Cash Flow | $218.5M | $96.4M | +122.1M |
| Free Cash Flow | $203.4M | $78.3M | +125.1M |
Source: Nutanix Investor Relations – Q3 FY25 results
Nutanix managed to reverse the losses of the previous year, closing the quarter with a GAAP net income of $63.4 million, equivalent to $0.22 per diluted share. Excluding stock-based compensation and other non-recurring items, the non-GAAP net income increased to $124.7 million or $0.42 per diluted share.
Strategic Focus: Generative AI and Hybrid Cloud
During its annual .NEXT conference held in Washington D.C., Nutanix announced important strategic advancements:
- Support for External Storage: General availability of the NCI Compute product, initially compatible with Dell PowerFlex.
- Partnership with Pure Storage for critical workloads, integrating FlashArray with Nutanix AHV and Flow.
- Expansion of services to Kubernetes and cloud-native environments thanks to Cloud Native AOS.
- Advanced integration with NVIDIA to accelerate the deployment of AI applications in enterprises through the Nutanix Enterprise AI suite.
Outlook for the Rest of 2025
The company expects to close the fiscal year with revenue between $2.520 and $2.530 billion and a non-GAAP operating margin close to 20.5%. Additionally, it estimates a total free cash flow for the year between $700 and $730 million.
| FY25 Financial Forecast | Estimated Range |
|---|---|
| Annual Revenue | $2.520 – $2.530B |
| Non-GAAP Operating Margin | ~20.5% |
| Free Cash Flow | $700 – $730M |
Rukmini Sivaraman, Chief Financial Officer of Nutanix, emphasized that the focus remains “on maintaining sustainable and profitable growth,” reinforcing the commitment to long-term value for shareholders.
Overall Assessment
Nutanix’s performance in the third fiscal quarter solidifies its transformation into a strategic multi-cloud platform provider while capitalizing on the wave of AI adoption and hybrid environments. Improved margins, cash generation, and positive ARR growth strengthen its position in a highly competitive market.