What changed in this filing

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Item 1. Business

2021-09-21 compared with 2020-09-23 · 124 added, 76 removed, 142 unchanged (58% of the section changed)

Nutanix, Inc.

("we," "us," "our" or "Nutanix") provides a leading enterprise cloud platform, which we call the Nutanix Cloud Platform, that consists of software solutions and cloud services that power our customers’ hybrid cloud and multicloud strategies.

enterprise infrastructure.

Our solutions run across private-, hybrid- and multicloud environments, and allow organizations to seamlessly "lift and shift" their workloads, including enterprise applications, high-performance databases, end-user computing and virtual desktop infrastructure ("VDI") services, cloud native workloads, and analytics applications, between different cloud environments.

Founded in 2009, we pioneered the hyperconverged infrastructure ("HCI") category, initially combining the disparate IT silos of compute, storage and networking into a single on-premises product.

As the market realized the power, scalability and customer choice that HCI provides, we continued to innovate, and Acropolis Hypervisor ("AHV") - our native, no-cost hypervisor designed to run all virtualized applications - was born.

Our goal is to provide a single, simple, open software platform for all hybrid and multicloud applications and data.

Founded in 2009, we pioneered the hyperconverged infrastructure ("HCI") category, initially combining the disparate IT silos of compute, storage and networking into a single on-premises product which offered total cost of ownership, scalability and customer choice.

We continued to innovate and developed Acropolis Hypervisor ("AHV") - our native hypervisor designed to run all virtualized applications.

To give our customers even more choice, we engineered our software solutions to run on a variety of server platforms, decoupling our software from our Nutanix-branded hardware appliances and powering a variety of on-premises private cloud deployments;

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That transition has continued with the adoption of "cloud" as a mainstream IT paradigm, which has motivated IT professionals to move toward hybrid cloud architectures that allow businesses to simultaneously utilize a private cloud powered by Nutanix software, along with third-party public cloud infrastructures for maximum flexibility.

We continue to transform our software solutions into a comprehensive enterprise cloud platform, based on web-scale engineering principles and a focus on operational simplicity, which allows our customers to power nearly any scale IT deployment.

We continue to transform our software solutions into a comprehensive enterprise cloud platform, based on web-scale engineering principles and with a focus on operational simplicity, which allows our customers to power nearly any scale IT deployment.

Although today our customers primarily use our enterprise cloud platform to power their on-premises private cloud deployments, our solutions also simplify the complexities of multicloud environments with a single management console for automation, cost governance and compliance.

The end result will be an enterprise cloud platform that empowers our customers to unify various clouds - on-premises private, public and distributed - into one seamless cloud, allowing IT to choose the right cloud for each application.

In addition to our transition to a software-centric business model, and to provide our customers with the freedom to choose the best consumption model based on their specific business needs, we have also continued to reshape our licensing by moving toward a subscription-based business model.

To provide our customers with the freedom to choose the best consumption model based on their specific business needs, we have also continued to reshape our licensing by moving toward a subscription-based business model.

A subscription-based business model means one in which our products, including associated support and entitlement arrangements, are sold with a defined term.

For more information, see the section titled "Components of Our Results of Operations" included in Part II, Item 7, as well as Note 2 of Notes to Consolidated Financial Statements included in Part II, Item 8, of this Annual Report on Form 10-K.

Furthermore, as part of our transition to a subscription-based business model, we have commenced our transition to a sales compensation structure that is based on Annual Contract Value ("ACV").

These transitions have caused, and will continue to cause, our traditional life-of-device licensing models to become increasingly replaced by term-based licenses, providing our customers with a subscription consumption option which are portable across hybrid- and multicloud deployments.

We believe that these transitions - from hardware to software solutions, and from life-of-device to subscription models - will contribute to our long-term growth, although they may have an adverse impact on our business and financial performance in the near term.

Furthermore, as part of our transition to a subscription-based business model, we have transitioned to a sales compensation structure that is based on Annual Contract Value ("ACV").

These transitions have caused, and will continue to cause, our traditional life-of-device licensing models to become increasingly replaced by term-based licenses, providing our customers with a subscription option which are portable across hybrid- and multicloud deployments.

We believe that these transitions - from hardware to software solutions, and from life-of-device to subscription models - will contribute to our long-term growth, although they have resulted in lower revenues during the period of transition.

In fiscal 2021, our subscription billings increased to 89.0% of total billings, up 8 percentage points from fiscal 2020, and our subscription revenue reached $1.2 billion, representing a year-over-year increase of 20.7%.

In fiscal 2020, our ACV billings was $505.2 million, representing a year-over-year increase of 17.9%.

In fiscal 2021, ACV billings was $594.3 million, representing a year-over-year increase of 17.6%.

The Nutanix Cloud Platform

Leveraging the foundation of our core HCI technology, the Nutanix Cloud Platform delivers a rich set of digital HCI services, datacenter services, DevOps services, and desktop services.

Digital HCI Services

Our HCI products – composed of Acropolis ("AOS"), a software-defined platform that converges compute, storage, and networking services, Prism, our consumer-grade control plane providing management and analytics for the entire enterprise cloud platform, and Acropolis Hypervisor ("AHV"), a native, enterprise-grade hypervisor designed to run all virtualized applications – form the foundation of the Nutanix Cloud Platform.

Leveraging the foundation of our core HCI technology, the Nutanix Cloud Platform delivers a rich set of products, solutions and services to enable our customers to manage their private cloud and, increasingly, their public and hybrid multicloud environments.

All of our offerings are supported by a unified control plane, unified Application Program Interfaces ("APIs"), security, and lifecycle management.

The Nutanix Cloud Platform is available in private cloud deployment, and is increasingly available on public cloud, through managed service providers and telcos, and in the future, as-a-Service.

We recently announced continued product portfolio simplification, to help streamline the products and offerings that we have developed over the years.

The description of our products and offerings below are based on our new simplified product portfolio, but will also refer, in parentheses, to the product names that we have used in the past.

Hybrid Cloud Infrastructure –

Our offerings in hybrid cloud infrastructure combine our core HCI software stack (AOS) and our native, enterprise-grade hypervisor (AHV), and also add in support for virtual networking, containers, network security and disaster recovery.

Acropolis (AOS) .

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Virtualization.

AOS supports major hypervisors, including our native, no-cost AHV.

AOS supports major hypervisors, including our native AHV.

Storage Capabilities .

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Storage capabilities include snapshots and cloning, performance acceleration capabilities, such as caching, data tiering and data locality and storage optimization, such as deduplication, compression and erasure coding, along with data protection and disaster recovery features.

• Networking Services.

Networking Visualization and Security .

AOS provides services to visualize the network, automate common network operations, secure the network and integrate with various third-party networking and security products.

Nutanix Prism is our consumer-grade control plane providing management and analytics across the enterprise cloud platform.

It delivers integrated management, robust operational analytics, self-service capabilities and one-click administration.

Prism allows routine IT operations that are typically manual and cumbersome to be fully automated or completed with just one click, including capacity planning, provisioning of new resources and troubleshooting.

Prism enables efficient centralized administration to manage multiple clusters within a single datacenter, or across multiple sites.

Prism also offers Application Programming Interfaces ("APIs") for integration with third-party products and advanced management and orchestration of Nutanix environments.

Acropolis Hypervisor .

We supplement the network visualization capabilities of AOS with application-centric firewall services based on advanced microsegmentation technology (Nutanix Flow) that protect applications against internal and external threats, as well as data encryption.

Acropolis Hypervisor (AHV) .

AHV is a native, enterprise-grade virtualization solution that is included with our enterprise cloud platform with no additional software components to license, install or manage.

AHV is built upon a widely-used open source hypervisor technology, known as KVM and extends its base functionality to include additional features such as virtual machine ("VM") high availability and live migration.

AHV also includes such features as flexible migrations, automated workload placement, security hardening, network virtualization, data protection and disaster recovery and rich analytics, while allowing for integrated management via Nutanix Prism to streamline the provisioning, placing and managing of VMs, thereby providing our customers with a high-performance virtualization solution while eliminating third-party virtualization costs.

Datacenter Services Solutions

The Nutanix Cloud Platform also provides the IT resources that data center professionals need to design, build and operate a cloud datacenter.

This includes scale-out storage services that consolidate management of structured and unstructured data.

AHV is built upon a widely-used open source hypervisor technology, known as KVM and extends its base functionality to include additional features such as virtual machine high availability and live migration.

AHV also includes such features as flexible migrations, automated workload placement, security hardening, network virtualization, data protection and disaster recovery and rich analytics.

Our offerings in hybrid cloud infrastructure also provide for automated deployment and management of Kubernetes clusters to simplify the provisioning, operations and lifecycle management of cloud-native environments, containerized applications and microservices (Nutanix Karbon).

In addition, our entire hybrid cloud infrastructure stack can not only be run in private cloud environments, but can also be deployed in a public cloud environment like Amazon Web Services ("AWS") bare-metal through Nutanix Clusters, and also allows the customer to move applications between private and public clouds, regardless of where they were originally deployed.

Nutanix Clusters also provides a single plane to manage private and public cloud infrastructure.

Cloud Management –

Our offerings in cloud management combine multicloud governance, orchestration and operations, for private cloud, public cloud, and hybrid cloud deployments.

Our offerings in cloud management include our control plane providing management and analytics across the enterprise cloud platform, which delivers integrated management, capacity planning, robust operational analytics, self-service capabilities and one-click administration, and enables efficient centralized administration to manage multiple clusters within a single datacenter, or across multiple sites (Prism Pro).

We also provide cloud governance (Nutanix Beam) as well as automation services that streamline application lifecycle management, provide self-service provisioning via an application marketplace, and deliver powerful multicloud orchestration (Nutanix Calm).

Emerging Products –

We have also developed a number of emerging products that complement our hybrid cloud infrastructure and cloud management offerings to further expand our customers’

ability to manage their hybrid cloud infrastructure.

Unified Storage (Nutanix Files and Nutanix Objects) –

Our Unified Storage product offering includes scale-out storage services that consolidate management of structured and unstructured data.

Nutanix customers can simplify storage operations, while delivering enterprise-grade NFS and SMB files services (Nutanix Files), as well as S3-compatible object services (Nutanix Objects), at nearly any scale.

Security is designed into the Nutanix Cloud Platform, including application-centric firewall services based on advanced microsegmentation technology (Nutanix Flow) that protects applications against internal and external threats, as well as data encryption.

Nutanix solutions also provide strong user authentication, authorization and access services, activity monitoring and comprehensive logging.

With multiple industry security certifications, Nutanix solutions help customers across industries meet stringent security and compliance mandates.

Beyond protecting applications and data against security threats, the Nutanix Cloud Platform provides essential capabilities to maintain business continuity in the event of an IT failure, and to quickly recover from unplanned downtime.

Capabilities include built-in multi-site data replication and synchronization services, orchestration runbooks, and validated integration with popular data back-up solutions.

We also provide a managed, cloud-based disaster recovery service (Nutanix Xi Leap) to maintain IT operations in the event of a datacenter outage.

DevOps Services Solutions

As part of our integrated offering, we deliver services for application developers and DevOps teams to accelerate the development, testing, provisioning and scaling of applications across different cloud environments.

These services include automated database management to simplify database administration and to efficiently manage database copies that proliferate in most IT environments (Nutanix Era).

Also included are automation services that streamline application lifecycle management, provide self-service provisioning via an application marketplace, and deliver powerful hybrid cloud orchestration (Nutanix Calm).

Our DevOps Services solutions also allow for automated deployment and management of Kubernetes clusters to simplify the provisioning, operations and lifecycle management of cloud-native environments, containerized applications and microservices (Nutanix Karbon).

Desktop Services Solutions

The Nutanix Cloud Platform provides a rich set of end-user computing ("EUC") services that can reduce the cost of delivering virtualized desktops and applications, while improving performance and scalability.

Database Automation and Database-as-a-Service (Nutanix Era) –

We also provide automated database management to simplify database administration and to efficiently manage database copies that proliferate in most IT environments (Nutanix Era).

Era supports a variety of databases, both proprietary and open source, and can run both in the private datacenter and in the public cloud through Nutanix Clusters.

Desktop-as-a-Service (Nutanix Frame) –

Our Desktop-as-a-Service product offering provides a rich set of end-user computing ("EUC") services that can reduce the cost of delivering virtualized desktops and applications, while improving performance and scalability.

Services include virtualization, file storage, security and networking for traditional VDI environments.

We also provide desktop-as-a-service (Nutanix Xi Frame) to deliver virtual apps or desktops to users from multiple public cloud environments and/or an enterprises private cloud datacenter, which can be easily accessed from any browser.

We also provide desktop-as-a-service (Nutanix Frame) to deliver virtual apps or desktops to users from multiple public cloud environments and/or an enterprises private cloud datacenter, which can be easily accessed from any browser.

Delivery of Our Solutions

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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 a term of one to five years.

Our subscription term-based licenses typically have terms ranging from one to five years.

Our cloud-based SaaS subscriptions have terms extending up to five years.

As we continue our transition toward a subscription-based business model, we expect a greater portion of our products to be delivered through subscription term-based licenses or cloud-based SaaS subscriptions.

Configured-to-order appliances, including our Nutanix-branded NX hardware line, can be purchased from one of our channel partners, original equipment manufacturers ("OEMs"), or directly from Nutanix.

We expect to continue delivering the majority of our products through subscription term-based licenses or cloud-based SaaS subscriptions.

Our enterprise 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.

Purchases of non-portable software are typically accompanied by the purchase of a separate support and entitlement agreement.

Purchases of term-based licenses and SaaS subscriptions have support and entitlements built into the license.

We have established relationships with channel, OEM, ecosystem and cloud partners, all of which help to drive the adoption and sale of our solutions with our end customers, and we sell our solutions primarily through our partners.

Our solutions can be purchased through one of our channel partners, original equipment manufacturers ("OEMs"), or directly from Nutanix.

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.

Our channel partners include distributors, resellers, managed service providers, telcos, global systems integrators, and independent software vendors.

Arrow Electronics, Inc., a distributor to our end customers, represented 24%, 29% and 32% of our total revenue for fiscal 2019, 2020 and 2021, respectively.

Tech Data Corporation, another distributor to our end customers, represented 13%, 14% and 15% of our total revenue for fiscal 2019, 2020 and 2021, respectively.

OEM Partners .

OEMs typically pre-install our software on hardware appliances and sell to end customers, and our offerings may also be sold through our OEMs and delivered directly to our end customers.

Super Micro Computer, Inc.

("Super Micro") and Flextronics Systems Limited ("Flextronics") pre-install our software on our Nutanix-branded NX series appliances.

("Supermicro") and Flextronics Systems Limited ("Flextronics") pre-install our software on Nutanix-branded NX configured-to-order hardware appliances.

Dell Technologies ("Dell"), Lenovo Group Ltd.

("Lenovo"), International Business Machines Corporation ("IBM"), Fujitsu Technology Solutions GmbH ("Fujitsu"), Hewlett Packard Enterprise ("HPE") and Inspur Group ("Inspur") pre-install our software on their hardware to create the Dell XC Series, Lenovo Converged HX Series, IBM CS Series, Fujitsu XF Series, HPE DX Series and Inspur inMerge 1000 Series appliances, respectively.

HPE also delivers our software with HPE Proliant Servers as a service through the HPE Greenlake offering.

Some of our OEM partners also sell associated support offerings.

Our enterprise cloud platform is typically purchased with one or more years of support and entitlements, which includes the right to software upgrades and enhancements as well as technical support.

Purchases of non-portable software are typically accompanied by the purchase of a separate support and entitlement agreement.

Purchases of term-based licenses and SaaS subscriptions have support and entitlements built into the license.

Ecosystem Partners .

We have developed relationships with a broad range of leading technology companies that help us deliver world-class solutions to our customers.

Through the Technology Alliance Partner arm of our Elevate Partner Program, our developer, application, hardware and infrastructure partners receive access to resources that allow them to validate and integrate their products with Nutanix solutions and engage in joint sales training and enablement.

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 and retain existing ones.

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.

Cloud Partners .

Our partnerships with public cloud providers help us to realize our vision of a hybrid multicloud.

The deployment of Nutanix Clusters on AWS extends the availability of our core HCI software, along with all of our solutions, to bare metal Amazon Elastic Compute Cloud instances on AWS.

We have also announced a partnership with Microsoft Corporation ("Microsoft") to offer a hybrid cloud solution on Azure by extending Nutanix Clusters to Azure environments and ultimately enabling hybrid cloud management, on-premises or in Azure, through the Azure Arc control plane.

Our Support Programs

Product Support.

We offer varying levels of product support to our customers based on their needs.

We also offer premium support programs through our technical account managers and designated support engineers.

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.

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We also sell to service providers, who utilize our enterprise cloud platform to provide a variety of cloud-based services to their customers.

We had a broad and diverse base of approximately 17,360 end customers as of July 31, 2020, including approximately 915 Global 2000 enterprises.

We had a broad and diverse base of over 20,000 end customers as of July 31, 2021, including approximately 980 Global 2000 enterprises.

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.

A single organization or customer may represent multiple end customers for separate divisions, segments, or subsidiaries.

The number of end customers grew from approximately 14,180 as of July 31, 2019 to approximately 17,360 as of July 31, 2020.

Our enterprise cloud platform is primarily sold through channel partners, including distributors, resellers and OEMs, and delivered directly to our end customers.

Arrow Electronics, Inc., a distributor to our end customers, represented 18%, 24% and 29% of our total revenue for fiscal 2018, 2019 and 2020, respectively.

Tech Data Corporation, another distributor to our end customers, represented 13%, 13% and 14% of our total revenue for fiscal 2018, 2019 and 2020, respectively.

Growth Strategy

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Continually innovate and maintain technology leadership.

Since inception, we have rapidly innovated from supporting limited applications and a single hypervisor to a full enterprise cloud platform that is designed to support a wide variety of workloads across private, public and multicloud deployments.

We intend to continue to invest heavily in developing our enterprise cloud platform with new features, services and products to expand our market opportunity.

We intend to continue to invest heavily in developing our enterprise cloud platform with new features, services and products to expand our market opportunity in both core and adjacent markets.

Invest to acquire new end customers.

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Our end customers typically deploy our technology initially for a specific project or application deployment.

Our sales teams and channel partners then seek to systematically target follow-on sales opportunities to drive additional purchases throughout our broader product portfolio.

Our sales teams and channel partners then seek to systematically target follow-on sales opportunities to drive additional purchases throughout our broader product portfolio, while also focusing on customer adoption and customer consumption of their original purchases.

This land and expand strategy enables us to quickly expand our footprint within our existing end customer base from follow-on orders that in the aggregate are often multiples of the initial order.

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In addition to our land and expand strategy described above, as part of our transition to a subscription-based model, we have enhanced our focus on renewals, which are typically associated with lower sales costs.

We have also commenced our transition to an ACV-based sales compensation structure starting in August 2020, which we expect will shorten the lengths of our contract terms, allowing us in turn to benefit from such efficiency gains associated with renewals.

• Deepen engagement with current channel and OEM partners and establish additional routes to market to enhance sales leverage.

While renewals have historically represented a small portion of our overall business, we expect that they will be a significant driver of our top-line growth as we continue in our subscription transformation.

Deepen engagement with current channel, OEM, cloud and ecosystem partners and establish additional routes to market to enhance sales leverage.

We have established meaningful channel partnerships globally and have driven strong engagement and commercial success with several major resellers and distributors.

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We intend to attract and engage new channel and OEM partners around the globe while also selling our standalone software for deployment on qualified hardware or a hosted service to maximize the availability of our solutions for our customers.

We will also continue to establish partnerships with cloud and ecosystem partners to provide our customers with freedom of choice.

Invest in rapid growth while remaining focused on our overall financial health.

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By maintaining this balance, we believe we can drive toward our high growth potential without sacrificing our overall financial health.

Key drivers of our path towards profitability include growth in renewals happening at a much lower cost compared to new sales and continuing to leverage sales and marketing efficiencies.

Sales and Marketing

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We also engage our end customers through our OEM partners, which license our software and package it with their hardware and sell through their direct sales forces and channel partners.

Technology Alliances .

We have developed relationships with a number of leading technology companies that help us deliver world-class solutions to our customers.

Through our Technology Alliance Partner Program, our developer, application, hardware and infrastructure partners get access to resources that allow them to validate and integrate their products with Nutanix solutions and engage in joint sales training and enablement.

We expect to continue leveraging our relationships with our channel and OEM partners, and deepening relationships with our cloud and ecosystem partners, to reach our end customers.

We supplement our sales efforts with marketing programs that include online advertising, corporate and third-party events, demand generation activities, social media promotions, media and analyst relations and community programs.

More recently, in response to the global COVID-19 pandemic, we have transformed nearly all of our in-person marketing programs into digital experiences.

For example, in September 2020 we hosted our sixth annual .NEXT Conference in a completely digital format, where approximately 41,000 digital attendees registered to learn about our current and future products and solutions.

For example, we converted both our 2020 and 2021 .NEXT Conferences to a completely digital format.

We also establish deep integration with our ecosystem of third-party technology partners and engage in joint marketing activities with them.

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We do not manufacture any hardware.

The Nutanix-branded NX series appliances, including those that are delivered by us, are manufactured for us based on our specifications by two manufacturers, Super Micro and Flextronics.

Super Micro and Flextronics assemble and test the Nutanix-branded NX series appliances and they generally procure the components used in the NX series appliances directly from third-party suppliers.

Our agreement with Super Micro was renewed in May 2020 for one year and will automatically renew for successive one-year periods thereafter, with the option to terminate upon each annual renewal.

Our agreement with Flextronics expires in November 2020 and automatically renews for successive one-year periods thereafter, with the option to terminate upon each annual renewal.

The Nutanix-branded NX series appliances, including those that are delivered by us, are manufactured for us based on our specifications by two manufacturers, Supermicro and Flextronics.

Supermicro and Flextronics assemble and test the Nutanix-branded NX series appliances and they generally procure the components used in the NX series appliances directly from third-party suppliers.

Our agreement with Supermicro was renewed in May 2021 for one year and will automatically renew for successive one-year periods thereafter, with the option to terminate upon each annual renewal.

Our agreement with Flextronics will expire in November 2021.

Distributors handle fulfillment and shipment for certain end customers, but do not hold inventory.

We typically accept and deliver orders within a short time frame.

In general, customers may cancel or reschedule orders without penalty prior to delivery, and delivery schedules requested by customers in their purchase orders vary based upon each customer’s particular needs.

As a result, we do not believe that our backlog at any particular time is a reliable indicator of future revenue.

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("Amazon"), Google Inc.

and Microsoft Corporation.

and Microsoft.

In addition, we compete against vendors of hyperconverged infrastructure products, such as Cisco, HPE, Dell, VMware and many smaller emerging companies.

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Additionally, as companies increasingly offer competing solutions, they may be less willing to cooperate with us as an OEM or otherwise.

For example, IBM recently acquired Red Hat, Inc.

("Red Hat") and they may begin to prioritize selling Red Hat products instead of our products in its global consulting business.

In addition, Dell owns a majority of the outstanding voting power of VMware, and a joint Dell and VMware offering would also compete directly with our core solutions.

We believe the principal competitive factors in our market include:

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total cost of ownership over the lifetime of the technology;

• product interoperability with third-party applications, infrastructure software, infrastructure systems and platforms and public clouds;

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;

complete customer experience, including usability, support and professional services.

We are also venturing into a number of markets that are adjacent to our core HCI market, both through the expansion of HCI in hybrid multicloud as well as through our emerging products.

These adjacent markets include areas such as disaster recovery, cloud management, files and object storage, database automation and database-as-a-service, and desktop-as-a-service.

Competitors in these markets include large, sophisticated companies who may have more experience or longer operating histories in these markets as well as new entrants.

We believe we are positioned favorably against our competitors based on these factors.

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We lease all of our facilities and do not own any real property.

We expect to add facilities as we grow our employee base and expand geographically.

While we expect to add facilities as we grow our employee base and expand geographically, we are also evaluating our longer-term facilities plans due to the COVID-19 pandemic and the potential for a hybrid work environment.

We believe that our facilities are adequate to meet our needs for the immediate future and that, should it be needed, suitable additional space will be available to accommodate the expansion of our operations.

Government Regulation

Our business activities are subject to various federal, state, local and foreign laws, rules and regulations.

Compliance with these laws, rules and regulations has not had, and is not expected to have, a material effect on our capital expenditures, results of operations or competitive position as compared to prior periods.

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.

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 6,080 employees worldwide as of July 31, 2021.

None of our employees in the United States are represented by a labor organization or is a party to any collective bargaining arrangement.

In certain of the European countries in which we operate, we are subject to, and comply with, local labor law requirements in relation to the establishment of works councils.

In certain of the European countries in which we operate, we are subject to, and comply with, local labor law requirements in relation to the establishment of works councils and/or industry-wide collective bargaining agreements.

We are often required to consult and seek the consent or advice of these works councils.

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.

Our human capital resources objectives include identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.

The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

Diversity, Equity, and Inclusion

At Nutanix, we value 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 businesses and communities we serve.

Attracting, fostering, and retaining a diverse, inclusive culture is essential to the continued success of our business.

Promoting diversity, equity, and inclusion in our workforce is one of our key corporate objectives, and to further support this objective we have implemented a number of initiatives, including by expanding our employee resource groups, enhancing our company-wide and unconscious bias and diversity training and overall education efforts, as well as mentorship programs, and forming Diversity, Equity, and Inclusion Councils both at the executive level –

led by our CEO, Rajiv Ramaswami –

and the broader employee level.

Total Rewards

We believe a robust, equitable, and competitive Total Rewards portfolio is essential to attracting and retaining diverse talent that moves Nutanix forward.

We design reward and recognition programs that resonate wherever our talent sits in the world.

Our reward packages are carefully crafted to offer physical, mental/emotional, and financial support to our employees and their families.

We regularly review our programs and encourage employee feedback about what they value most.

In addition to specifically tailored packages for each country based on local market practice and the competitive landscape, we also provide a range of globally available support programs such as an Employee Assistance Program, online health engagement and child development support.

Health, Wellness, and Safety

Our priority is the health and safety of our employees.

Throughout the COVID-19 pandemic, we have continued to implement a number of precautionary measures to ensure the continued safety of our employees.

This has included the implementation of a remote work policy.

We also continue to support the well-being and continued development of our now primarily remote workforce by instituting during the pandemic quarterly well-being days, during which all employees can collectively take a mental and physical break, and launching programs like quarterly well-being workshops, no-meeting Fridays, flexible work schedules, mindfulness sessions, and internal social media well-being challenges.

Growth and Development

One of our culture principles is to Believe in Striving -- to constantly learn, continuously improve, and eternally evolve -- and to that end we invest significant resources to actively foster a learning culture throughout the company and to empower our employees to drive their personal and professional growth by equipping them with various learning programs, as well as extensive onboarding and training programs.

Our learning programs are available for our employees at all levels of career progression and include digital learning programs, speed coaching sessions, customized learning workshops, management enablement and skills training for current, new and future managers, language learning programs, and employee wellness programs.

We believe that by empowering our employees as they strive to grow personally and professionally, we will be able to build a flexible and resilient workforce and maintain and nurture a robust pipeline of talent to fuel our future growth and strategy.

Information about Segment and Geographic Areas

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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.

We also provide a link to the section of the SEC’s website at www.sec.gov that has, or will have, all of our public filings, including this Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, our Proxy Statements and other ownership-related filings.

We use our investor relations website as well as social media as channels of distribution for important company information.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business