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Research Alert: Ntnx Posts Q3 Beats; Margins Outlook Show Improvement

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

NTNX delivered Q3 FY 26 beats, with revenue of $703.1M (+10% Y/Y) exceeding consensus by $16.7M, due to subscription traction and healthy demand. Annual recurring revenue grew 14% Y/Y to $2.43B, though sequential growth decelerated. Strong operating leverage drove GAAP margin expansion of 240 bps to 10.0% and non-GAAP margin growth of 80 bps to 22.3%. The company launched strategic AI initiatives including Nutanix Agentic AI solution, NetApp alliance, and NKP Metal for Kubernetes, positioning NTNX to capitalize on AI infrastructure demand beyond traditional virtualization. Management raised FY 26 revenue guidance to $2.82B-$2.84B and non-GAAP operating margin to 22.5%, while increasing FCF expectations to $760M-$780M, though Q4 revenue guidance of $725M-$745M came below estimates. We believe the margin and FCF guidance increases suggest moderation in supply chain challenges, while AI initiatives expand NTNX's addressable market opportunities in hybrid cloud and enterprise AI adoption.

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