Nutanix (NASDAQ: NTNX) saw its shares jump 7.2% in after-hours trading on Wednesday, as the hybrid-cloud infrastructure company delivered a stronger-than-expected fiscal fourth-quarter performance and maintained its fiscal 2027 revenue outlook. The stock reached $70.10 as of 17:22 EDT, adding approximately $1.27 billion to the company's equity value, based on 270.32 million shares outstanding.
The after-hours rally came after Nutanix reported quarterly revenue of $757.1 million, a 16% increase year-over-year and $18.8 million above the consensus estimate of $738.3 million. Adjusted earnings per share came in at $0.60, comfortably beating the analyst forecast of $0.49. The company also delivered a non-GAAP operating margin of 26.2%, up 790 basis points from 18.3% in the prior-year period, signaling improved profitability alongside growth.
Free cash flow surged 34% to $277.6 million, up from $207.8 million in the same quarter last year. This robust cash generation underscores Nutanix's ability to balance expansion with financial discipline, a key concern for investors in the competitive cloud software space. The company's annual recurring revenue (ARR) also rose 16% to $2.55 billion, keeping pace with top-line growth and providing visibility into subscription demand.
Chief Executive Rajiv Ramaswami described the quarter as a "strong finish to fiscal 2026," noting that the company added more than 3,000 new customers over the year. The company's guidance for fiscal 2027 projects revenue in the range of $3.18 billion to $3.23 billion, with the midpoint of $3.205 billion representing a 12.5% increase over fiscal 2026. Nutanix also guided for a non-GAAP operating margin between 24% and 25% and free cash flow of $850 million to $950 million.
Investors appeared to reward the company's ability to maintain its growth trajectory while improving profitability. The after-hours price appreciation valued Nutanix at roughly $18.95 billion, or 5.9 times the midpoint of fiscal 2027 revenue and 21.1 times the midpoint of free cash flow. This premium valuation reflects confidence in the company's hybrid-cloud positioning and its expanding partnerships with major technology players.
During fiscal 2026, Nutanix broadened collaborations with AMD, Lenovo, NetApp, and Nvidia, which have expanded distribution channels for its cloud platform. These alliances are expected to drive further adoption of Nutanix's software-defined storage and hyperconverged infrastructure solutions, particularly in AI and data-intensive workloads.
Wall Street analysts were largely constructive on the stock ahead of the earnings report. The consensus rating is Moderate Buy, based on eighteen analysts, with an average price target of $64.21. UBS raised its target to $80 prior to the release, while Rosenblatt set a $75 target, reflecting optimism about Nutanix's growth prospects.
Despite the positive momentum, there are some risks to consider. Adjusted gross margin declined by 60 basis points, and the company noted potential server supply shortages that could delay deployments and impact revenue and cash flow. Additionally, after-hours trading is less liquid than regular sessions, which could amplify price swings. The company expects first-quarter revenue between $755 million and $765 million, with an adjusted operating margin of 26% to 28%.
As Nutanix moves into fiscal 2027, the market will be watching whether the company can sustain its double-digit growth while maintaining its improved margin profile. With a strong pipeline and expanding partner ecosystem, the hybrid-cloud leader appears well-positioned to capitalize on the ongoing digital transformation trend.
