Nutanix, Inc. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 82 Consolidated Balance Sheets 84 Consolidated Statements of Operations 85 Consolidated Statements of Comprehensive Income (Loss) 86 Consolidated Statements of Stockholders’ Equity (Deficit ) 87 Consolidated Statements of Cash Flows 88 Notes to Consolidated Financial Statements 89 Note 1: Overview and Summary of Significant Accounting Policies 89 Note 2: Revenue, Deferred Revenue and Deferred Commissions 99 Note 3: Fair Value Measurements 100 Note 4: Balance Sheet Components 102 Note 5: Debt 105 Note 6: Leases 110 Note 7 : Commitments and Contingencies 111 Note 8 : Stockholders' Equity 113 Note 9 : Equity Incentive Plans 114 Note 10: Restructuring Charges 117 Note 11: Net Income (Loss) Per Share 118 Note 12 : Income Taxes 119 Note 1 3: Segment Information 123 81 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Nutanix, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Nutanix, Inc. and subsidiaries (the "Company") as of July 31, 2026 and 2025, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity (deficit), and cash flows, for each of the three years in the period ended July 31, 2026, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended July 31, 2026, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of July 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated September 17, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 82 Table of Contents Revenue Recognition — Refer to Notes 1 and 2 to the financial statements Critical Audit Matter Description The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generates revenue primarily from the sale of subscription term-based licenses, and which can be deployed on a variety of qualified hardware platforms or, in the case of the Company’s cloud-based SaaS offerings, via hosted service or delivered pre-installed on a server that is configured to order. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer. The majority of the Company’s customers invoiced upfront, including invoices for multi-year subscriptions, with payment terms of 30-45 days. In certain circumstances, customers may be invoiced under alternative payment arrangements, including installment billings. The Company applies judgment in determining the transaction price for contracts with alternative payment arrangements. We identified revenue recognition in certain material contracts as a critical audit matter because of the significant judgments management makes in evaluating the impact of the alternative payment arrangements as they may impact the total transaction price. This required a high degree of auditor judgment and an increased extent of testing. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Company’s revenue recognition for certain material contracts included the following, among others: • We tested the effectiveness of internal controls over revenue contracts, including the review of contracts and the determination of the transaction price. • We evaluated management’s significant accounting policies related to revenue recognition for compliance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. • We selected a sample of certain material contracts with customers and performed the following procedures: – We obtained and read customer contracts and related contract documentation, including master agreements, purchase orders, invoices, and related amendments. – We evaluated whether management properly identified the contract terms (including those related to alternative payment arrangements) and tested management’s application of the Company's policies, including the determination of the total transaction price in the arrangement. /s/ DELOITTE & TOUCHE LLP San Jose, California September 17, 2026 We have served as the Company’s auditor since 2013. 83 Table of Contents NUTANIX, INC. CONSOLIDATE D BALANCE SHEETS As of July 31, 2025 July 31, 2026 (in thousands, except per share data) Assets Current assets: Cash and cash equivalents $ 769,502 $ 777,308 Short-term investments 1,223,234 1,584,155 Accounts receivable, net of allowances of $ 2,187 and $ 3,313 , respectively 337,967 289,251 Deferred commissions—current 153,072 156,316 Prepaid expenses and other current assets 105,391 221,483 Total current assets 2,589,166 3,028,513 Property and equipment, net 142,814 134,887 Operating lease right-of-use assets 134,526 164,427 Deferred commissions—non-current 189,221 217,606 Intangible assets, net 2,615 1,837 Goodwill 185,235 185,235 Deferred tax asset (1) 16,974 1,215,823 Other assets—non-current 22,643 125,357 Total assets $ 3,283,194 $ 5,073,685 Liabilities and Stockholders’ (Deficit) Equity Current liabilities: Accounts payable $ 81,599 $ 96,508 Accrued compensation and benefits 230,498 269,181 Accrued expenses and other current liabilities 24,187 36,117 Deferred revenue—current 1,054,023 1,246,575 Operating lease liabilities—current 23,234 35,713 Total current liabilities 1,413,541 1,684,094 Deferred revenue—non-current 1,058,731 1,176,794 Operating lease liabilities—non-current 115,754 134,310 Convertible senior notes, net 1,343,818 1,348,711 Other liabilities—non-current 45,870 27,211 Total liabilities 3,977,714 4,371,120 Commitments and contingencies (Note 7) Stockholders’ (deficit) equity: Common stock, par value of $ 0.000025 per share— 1,000,000 Class A shares authorized as of July 31, 2025 and 2026; 269,045 and 270,829 Class A shares issued and outstanding as of July 31, 2025 and 2026, respectively 7 7 Additional paid-in capital 4,200,466 4,416,059 Accumulated other comprehensive income (loss) 700 ( 4,895 ) Accumulated deficit ( 4,895,693 ) ( 3,708,606 ) Total stockholders’ (deficit) equity ( 694,520 ) 702,565 Total liabilities and stockholders’ (deficit) equity $ 3,283,194 $ 5,073,685 (1) Prior to the fourth quarter of fiscal 2026, this was included within Other assets—non-current. Prior period amounts have been updated to conform to the current period presentation. See the accompanying notes to the consolidated financial statements. 84 Table of Contents NUTANIX, INC. CONSOLIDATED STATEME NTS OF OPERATIONS Fiscal Year Ended July 31, 2024 2025 2026 (in thousands, except per share data) Revenue: Product $ 1,067,948 $ 1,341,374 $ 1,489,693 Support, maintenance and other services 1,080,868 1,196,553 1,363,852 Total revenue 2,148,816 2,537,927 2,853,545 Cost of revenue: Product 36,441 28,341 21,443 Support, maintenance and other services 287,671 306,441 355,306 Total cost of revenue 324,112 334,782 376,749 Gross profit 1,824,704 2,203,145 2,476,796 Operating expenses: Sales and marketing 977,286 1,056,465 1,150,278 Research and development 638,992 736,823 790,892 General and administrative 200,863 237,316 261,656 Total operating expenses 1,817,141 2,030,604 2,202,826 Income from operations 7,563 172,541 273,970 Other (expense) income, net ( 108,881 ) 39,107 53,138 (Loss) income before provision for (benefit from) income taxes ( 101,318 ) 211,648 327,108 Provision for (benefit from) income taxes 23,457 23,282 ( 1,179,729 ) Net (loss) income $ ( 124,775 ) $ 188,366 $ 1,506,837 Net (loss) income per share attributable to Class A common stockholders, basic $ ( 0.51 ) $ 0.70 $ 5.61 Net (loss) income per share attributable to Class A common stockholders, diluted $ ( 0.51 ) $ 0.65 $ 5.17 Weighted average shares used in computing net (loss) income per share attributable to Class A common stockholders, basic 244,743 267,479 268,691 Weighted average shares used in computing net (loss) income per share attributable to Class A common stockholders, diluted 244,743 294,083 292,183 See the accompanying notes to the consolidated financial statements. 85 Table of Contents NUTANIX, INC. CONSOLIDATED STATEME NTS OF COMPREHENSIVE INCOME (LOSS) Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Net (loss) income $ ( 124,775 ) $ 188,366 $ 1,506,837 Other comprehensive income (loss), net of tax: Change in unrealized gain (loss) on available-for-sale securities, net of tax 5,317 554 ( 5,595 ) Comprehensive (loss) income $ ( 119,458 ) $ 188,920 $ 1,501,242 See the accompanying notes to the consolidated financial statements. 86 Table of Contents NUTANIX, INC. CONSOLIDATED STATE MENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) Fiscal Year Ended July 31, 2026 Common Stock Additional Paid-In Accumulated Other Comprehensive Accumulated Total Stockholders’ Shares Amount Capital Income (Loss) Deficit (Deficit) Equity (in thousands) Balance - July 31, 2023 239,607 $ 6 $ 3,930,668 $ ( 5,171 ) $ ( 4,632,922 ) $ ( 707,419 ) Issuance of common stock through employee equity incentive plans 12,429 — 4,241 — — 4,241 Issuance of common stock from ESPP purchase 1,870 — 47,327 — — 47,327 Shares withheld related to net share settlement of equity awards ( 2,996 ) — ( 161,552 ) — — ( 161,552 ) Repurchase and retirement of common stock ( 2,583 ) — ( 41,637 ) — ( 89,502 ) ( 131,139 ) Issuance of common stock related to conversion of 2026 Notes 16,854 1 6,018 — — 6,019 Stock-based compensation — — 333,833 — — 333,833 Other comprehensive income — — — 5,317 — 5,317 Net loss — — — — ( 124,775 ) ( 124,775 ) Balance - July 31, 2024 265,181 7 4,118,898 146 ( 4,847,199 ) ( 728,148 ) Issuance of common stock through employee equity incentive plans 10,915 — 2,799 — — 2,799 Issuance of common stock from ESPP purchase 1,561 — 66,136 — — 66,136 Shares withheld related to net share settlement of equity awards ( 3,950 ) — ( 258,244 ) — — ( 258,244 ) Repurchase and retirement of common stock ( 4,662 ) — ( 71,040 ) — ( 236,860 ) ( 307,900 ) Induced conversion of the 2027 Notes — — ( 9,673 ) — — ( 9,673 ) Stock-based compensation — — 351,590 — — 351,590 Other comprehensive income — — — 554 — 554 Net income — — — — 188,366 188,366 Balance - July 31, 2025 269,045 7 4,200,466 700 ( 4,895,693 ) ( 694,520 ) Issuance of common stock through employee equity incentive plans 8,841 — 93 — — 93 Issuance of common stock from ESPP purchase 1,515 — 61,354 — — 61,354 Issuance of common stock through private placement 4,137 — 150,000 — — 150,000 Shares withheld related to net share settlement of equity awards ( 3,292 ) — ( 189,728 ) — — ( 189,728 ) Repurchase and retirement of common stock ( 9,417 ) — ( 163,793 ) — ( 319,750 ) ( 483,543 ) Stock-based compensation — — 357,667 — — 357,667 Other comprehensive loss — — — ( 5,595 ) — ( 5,595 ) Net income — — — — 1,506,837 1,506,837 Balance - July 31, 2026 270,829 $ 7 $ 4,416,059 $ ( 4,895 ) $ ( 3,708,606 ) $ 702,565 See the accompanying notes to the consolidated financial statements. 87 Table of Contents NUTANIX, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Cash flows from operating activities: Net (loss) income $ ( 124,775 ) $ 188,366 $ 1,506,837 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 73,199 72,701 70,640 Stock-based compensation 333,833 351,590 357,667 Amortization of debt discount and issuance costs 41,600 3,877 5,452 Conversion of convertible senior notes attributable to debt discount and issuance costs 107,877 — — Operating lease cost, net of accretion 31,462 29,029 34,946 Non-cash interest expense 18,550 — — Inducement expense from partial repurchase of the 2027 Notes — 11,347 — Deferred income taxes 2,520 3,639 ( 1,198,850 ) Other ( 15,832 ) ( 8,468 ) ( 4,792 ) Changes in operating assets and liabilities: Accounts receivable, net ( 53,811 ) ( 71,886 ) ( 39,170 ) Deferred commissions ( 820 ) 16,517 ( 31,630 ) Prepaid expenses and other assets 46,623 ( 8,101 ) ( 130,217 ) Accounts payable 14,749 30,018 19,443 Accrued compensation and benefits 51,923 33,286 44,492 Accrued expenses and other liabilities ( 82,632 ) ( 4,269 ) 709 Operating leases, net ( 30,475 ) ( 29,954 ) ( 33,813 ) Deferred revenue 258,940 203,764 314,974 Net cash provided by operating activities 672,931 821,456 916,688 Cash flows from investing activities: Maturities of investments 774,237 476,173 805,208 Purchases of investments ( 871,259 ) ( 1,359,593 ) ( 1,167,799 ) Sales of investments 706,363 3,016 2,750 Payments for acquisitions, net of cash acquired ( 4,500 ) — — Purchases of property and equipment ( 75,252 ) ( 71,283 ) ( 76,013 ) Net cash provided by (used in) investing activities 529,589 ( 951,687 ) ( 435,854 ) Cash flows from financing activities: Repayment of convertible notes ( 817,633 ) — — Proceeds from sales of shares through employee equity incentive plans 51,571 68,935 61,447 Proceeds from sales of shares through private placement — — 150,000 Taxes paid related to net share settlement of equity awards ( 161,552 ) ( 256,636 ) ( 195,534 ) Proceeds from the issuance of convertible notes, net of issuance costs — 848,010 — Payment of third-party debt issuance costs — ( 3,448 ) — Partial repurchase of the 2027 Notes — ( 95,453 ) — Payment of revolver issuance costs — ( 2,794 ) — Repurchases of common stock ( 131,139 ) ( 307,900 ) ( 483,543 ) Other financing activities, net ( 3,876 ) ( 6,628 ) ( 5,399 ) Net cash (used in) provided by financing activities ( 1,062,629 ) 244,086 ( 473,029 ) Net increase in cash, cash equivalents and restricted cash $ 139,891 $ 113,855 $ 7,805 Cash, cash equivalents and restricted cash—beginning of period 515,771 655,662 769,517 Cash, cash equivalents and restricted cash—end of period $ 655,662 $ 769,517 $ 777,322 Restricted cash (1) 392 15 14 Cash and cash equivalents—end of period $ 655,270 $ 769,502 $ 777,308 Supplemental disclosures of cash flow information: Cash paid for income taxes $ 23,647 $ 32,537 $ 30,274 Supplemental disclosures of non-cash investing and financing information: Purchases of property and equipment included in accounts payable and accrued and other liabilities $ 19,275 $ 6,945 $ 2,412 Forfeited paid-in-kind interest recognized in equity upon note conversion $ 6,019 $ — $ — Unpaid taxes related to net share settlement of equity awards included in accrued expenses and other liabilities $ — $ 13,423 $ 7,615 (1) Included within other assets—non-current in the consolidated balance sheets. See the accompanying notes to the consolidated financial statements. 88 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. OVER VIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Description of Business Nutanix, Inc. was incorporated in the state of Delaware in September 2009. Nutanix, Inc. is headquartered in San Jose, California, and together with its wholly-owned subsidiaries (collectively, "we," "us," "our," or "Nutanix"), has operations throughout North America, Europe, Asia Pacific, the Middle East, Latin America, and Africa. We are a hybrid cloud and AI platform company, offering organizations a unified infrastructure software platform to run applications, data, and AI anywhere. The Nutanix Cloud Platform is designed to enable organizations to build hybrid cloud infrastructure. It provides a consistent cloud operating model with a single platform for running and managing applications, agentic AI workloads, and data in core data centers, at the edge, and in public clouds. The Nutanix Cloud Platform supports a wide variety of workloads with varied compute, storage, and network requirements. These workloads include traditional business-critical general-purpose applications, modern applications (including containerized applications running on Kubernetes), data platforms (including SQL, NoSQL and vector databases, as well as business intelligence applications), and enterprise AI workloads (including machine learning, generative AI, and agentic AI applications). Our business is organized into a single operating and reportable segment. We operate a subscription-based business model, meaning our products, including associated support and maintenance arrangements, are sold with a defined duration. Our solutions are primarily sold through channel partners and original equipment manufacturers ("OEMs") (collectively, "Partners") and delivered directly to our end customers. Principles of Consolidation The accompanying consolidated financial statements, which include the accounts of Nutanix, Inc. and its wholly-owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Such management estimates and assumptions include, but are not limited to, the estimate of standalone selling prices for products and related support; useful lives and recoverability of intangible assets and property and equipment; allowance for credit losses; determination of fair value of stock-based awards with market conditions; accounting for income taxes, including the valuation allowance on deferred tax assets and uncertain tax positions; purchase commitment liabilities to our contract manufacturer; sales commissions expense and the period of benefit for deferred commissions; whether an arrangement is or contains a lease; and contingencies and litigation. Management evaluates these estimates and assumptions on an ongoing basis using historical experience and other factors and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions. 89 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Concentration of Risk Credit Risk — Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and receivables from customers. We invest only in high-quality credit instruments and maintain our cash and cash equivalents and available-for-sale investments in fixed income securities. Management believes that the financial institutions that hold our investments are financially sound and, accordingly, are subject to minimal credit risk. Our deposits are with multiple institutions, however such deposits may exceed federally insured limits. We provide credit, in the normal course of business, to a number of companies and perform credit evaluations of our customers. Concentration of Revenue and Accounts Receivable — We sell our products primarily through our Partners and occasionally directly to end customers. For the fiscal years ended July 31, 2024, 2025 and 2026 , no end customer accounted for more than 10 % of total revenue or accounts receivable. For each significant Partner, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable, net are as follows: Revenue Accounts Receivable as of Fiscal Year Ended July 31, July 31, 2025 July 31, 2026 Partners 2024 2025 2026 Partner A ( 1 ) 16 % 17 % 13 % 16 % Partner B 11 % 10 % ( 1 ) ( 1 ) 13 % Partner C ( 1 ) ( 1 ) ( 1 ) ( 1 ) 12 % Partner D 16 % 15 % 15 % 14 % 10 % Partner E 31 % 25 % 22 % ( 1 ) ( 1 ) (1) Less than 10% Summary of Significant Accounting Policies Cash, Cash Equivalents and Short-Term Investments We classify all highly liquid investments with original maturities of three months or less from the date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months as marketable securities. We determine the appropriate classification of our marketable securities at the time of purchase and reevaluate such designation as of each balance sheet date. We classify and account for our marketable securities as available-for-sale securities. We classify our marketable securities with stated maturities greater than twelve months as short-term investments due to our intent and ability to use these securities to support our current operations. Our marketable securities are recorded at their estimated fair value. Unrealized gains or losses on available-for-sale securities are reported in other comprehensive income (loss). We periodically review whether our securities may be other-than-temporarily impaired, including whether or not (i) we have the intent to sell the security or (ii) it is more likely than not that we will be required to sell the security before its anticipated recovery. If one of these factors is met, we will record an impairment loss associated with our impaired investment. The impairment loss will be recorded as a write-down of investments in our consolidated balance sheets and a realized loss within other expense in our consolidated statements of operations. 90 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Fair Value Measurement We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which to transact and the market-based risk. We apply fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in our consolidated financial statements on a recurring basis. The carrying amounts reported in our consolidated financial statements for cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. The fair value of the outstanding 0.25 % convertible senior notes due 2027 (the "2027 Notes") is determined based on the closing trading price per $ 100 of the 2027 Notes as of the last day of trading for the period. The fair value of the outstanding 0.50 % convertible senior notes due 2029 (the "2029 Notes") is determined based on the closing trading price per $ 100 of the 2029 Notes as of the last day of trading for the period. Convertible Senior Notes Our convertible senior notes, including any embedded conversion features, are accounted for under the convertible debt accounting model and are treated as a liability, net of unamortized issuance costs. The carrying amount of the liability is classified as a current liability if we have committed to settle with current assets; otherwise, it is classified as a long-term liability, as we retain the option to settle conversion requests in shares of our Class A common stock. The embedded conversion features are not remeasured as long as they do not meet the separation requirement of a derivative; otherwise, they are classified as derivative instruments and accounted for as such. Issuance costs are amortized to interest expense using the effective interest rate method over the term of the notes. In accounting for a holder’s exercise in accordance with a note’s original conversion terms of a conversion option for which the carrying amount has previously been reclassified to equity, any unamortized discount remaining at the date of conversion is first recognized as interest, and then the remaining carrying amount of the converted notes is reduced by the cash transferred and then recognized in equity to reflect the shares issued, such that no gain or loss is recognized. In accounting for extinguishments of the notes, the reacquisition price of the extinguished notes is compared to the carrying amount of the respective extinguished notes and a gain or loss is recorded in other expense, net on our consolidated statements of operations. Accounts Receivable and Allowance for Credit Losses Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. Credit is extended to customers based on an evaluation of their financial condition and other factors. We generally do not require collateral or other security to support accounts receivable. We perform ongoing credit evaluations of our customers and maintain an allowance for credit losses. The allowance for credit losses is based on the best estimate of the amount of probable credit losses in existing accounts receivable. We assess credit losses on accounts receivable by taking into consideration past collection experience, the credit quality of the customer, the age of the receivable balance, current and future economic conditions, and forecasts that may affect the collectibility of the reported amount. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filings or substantial downgrading of credit ratings), we record an allowance for credit losses in order to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we record an allowance for credit losses based on the length of time the receivable is past due and our historical experience of collections and write-offs. 91 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The changes in the allowance for credit losses are as follows: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Allowance for credit losses—beginning balance $ 733 $ 772 $ 2,187 Charged to allowance for credit losses 830 1,415 1,321 Write-offs ( 791 ) — ( 195 ) Allowance for credit losses—ending balance $ 772 $ 2,187 $ 3,313 Property and Equipment Property and equipment, including leasehold improvements, are stated at cost, less accumulated depreciation and amortization. We include the cost to acquire demonstration units and the related accumulated depreciation in property and equipment as such units are generally not available for sale. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the related assets. In June 2026, we completed a comprehensive operational assessment of our server, data center engineering, and other equipment and extended the estimated useful life of these assets from three years (36 months) to five years (60 months). The change in accounting estimate will be effective beginning in fiscal 2027 and applied on a prospective basis. The expected impact to depreciation expense, net income and earnings per share is not expected to be material. Leases We determine if an arrangement is or contains a lease at inception by evaluating various factors, including whether a vendor’s right to substitute an identified asset is substantive. Lease classification is determined at the lease commencement date when the leased assets are made available for our use. Operating leases are included in operating lease right-of-use assets, operating lease liabilities—current and operating lease liabilities—non-current in our consolidated balance sheets. Finance leases are included in property and equipment, net, accrued expenses and other current liabilities and other liabilities—non-current in our consolidated balance sheets. Right-of-use assets ("ROU assets") represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist primarily of fixed payments under the arrangement, less any lease incentives, such as rent holidays. Variable lease payments not dependent on an index or a rate are expensed as incurred and are not included within the ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance, property taxes and utilities. We use an estimate of our incremental borrowing rate ("IBR") based on the information available at the lease commencement date in determining the present value of lease payments, unless the implicit rate is readily determinable. In determining the appropriate IBR, we consider information including, but not limited to, our credit rating, the lease term and the currency in which the arrangement is denominated. Our lease terms may include renewal options, which are not included in the lease terms for calculating our lease liability, unless we are reasonably certain that we will exercise the renewal option at the time of the lease commencement. Lease costs are recognized on a straight-line basis as operating expenses within our consolidated statements of operations. We present lease payments within cash flows from operations within our consolidated statements of cash flows. For our operating leases, we account for lease and non-lease components as a single lease component. Additionally, we do not record leases on our consolidated balance sheet that have a lease term of 12 months or less at the lease commencement date. 92 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Goodwill, Intangible Assets and Other Long-Lived Assets Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that are not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, customer relationships and trade names, resulting from business combinations. Finite-lived intangible assets are recorded at fair value, net of accumulated amortization. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense is included as a component of cost of product revenue and sales and marketing expense in our consolidated statements of operations. Amounts included in sales and marketing expense relate to customer relationships and trade names. Goodwill and other intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually, in the fourth quarter of each fiscal year. Such goodwill and other intangible assets may also be tested for impairment between annual tests in the presence of impairment indicators such as, but not limited to: (i) a significant decrease in the market price of a long-lived asset (asset group); (ii) a significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition; (iii) a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator; (iv) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group); (v) a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group); or (vi) a current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. Goodwill is tested for impairment by comparing the reporting unit's carrying value, including goodwill, to the fair value of the reporting unit. We operate under one reporting unit and for our annual goodwill impairment test, we determine the fair value of our reporting unit based on our enterprise value. We may elect to utilize a qualitative assessment to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying value. If, after assessing the qualitative factors, we determine that it is more likely than not that the fair value of our reporting unit is less than its carrying value, an impairment analysis will be performed. We compare the fair value of our reporting unit with its carrying amount and if the carrying value of the reporting unit exceeds its fair value, an impairment loss will be recognized. Long-lived assets, such as property and equipment and finite-lived intangible assets subject to depreciation and amortization, are evaluated for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Among the factors and circumstances we consider in determining recoverability are: (i) a significant decrease in the market price of a long-lived asset; (ii) a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; (iii) a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; (iv) an accumulation of costs significantly in excess of the amount originally expected for the acquisition; and (v) current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. 93 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) There have been no indicators of impairment of goodwill, intangible assets or other long-lived assets and we did not record any material impairment losses during fiscal 2024, 2025 or 2026 . Revenue Recognition We generate revenue primarily from the sale of the Nutanix Cloud Platform, sold primarily as subscription term-based licenses, and which can be deployed on a variety of qualified hardware platforms or, in the case of our cloud-based SaaS offerings, via hosted service or delivered pre-installed on a server that is configured to order. Our subscription term-based licenses are sold separately, or can be sold alongside configured-to-order servers. Our subscription term-based licenses typically have a term of one to five years. Our cloud-based SaaS subscriptions typically have terms extending up to five years. Our customers generally purchase their qualified hardware platforms for deployment of our software from one of our channel partners or OEMs. Our platform typically includes one or more years of support and maintenance, which provides customers with the right to software upgrades and enhancements as well as technical support. Our platform is primarily sold through channel partners and OEMs. Revenue is recognized net of sales tax and withholding tax. Product revenue — Product revenue primarily consists of software revenue. A majority of our product revenue is generated from the sale of the Nutanix Cloud Platform. We also sell renewals of previously purchased software licenses and SaaS offerings. We recognize revenue from our software products upon the transfer of control to the customer. For sales of our software purchased alongside a server from an OEM or other partner, revenue is typically recognized upon shipment of the server. For software sold separately from a server, revenue is typically recognized when the software is made available to the customer. For our SaaS offerings, revenue is typically recognized as the services are performed. In the infrequent transactions where the hardware is purchased directly from Nutanix, we consider ourselves to be the principal in the transaction, and we record revenue and costs of goods sold on a gross basis. Support, maintenance and other services revenue — We generate our support, maintenance and other services revenue primarily from software maintenance subscriptions and support subscriptions, which include the right to software upgrades and enhancements as well as technical support. The majority of our product sales are sold in conjunction with software maintenance subscriptions and support subscriptions, with terms typically ranging from one to five years. Occasionally, we also sell professional services with our products. We recognize revenue from software maintenance subscriptions and support contracts ratably over the contractual service period, which typically commences upon transfer of control of the corresponding products to the customer. We recognize revenue related to professional services as they are performed. The core principle of Accounting Standards Codification ("ASC") 606 is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This principle is achieved by applying the following five-step approach: • Identification of the contract, or contracts, with a customer — A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. 94 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) • Identification of the performance obligations in the contract — Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or services either on their own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods or services, we apply judgment to determine whether promised goods or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. • Determination of the transaction price — The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. We apply judgment in determining the transaction price for contracts with alternative payment arrangements. • Allocation of the transaction price to the performance obligations in the contract — If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price ("SSP"). We determine SSP based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, we estimate the SSP, taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. • Recognition of revenue when, or as, performance obligations are satisfied — We satisfy performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied with the transfer of a promised good or service to a customer. For additional details on revenue recognition, refer to Note 2. Contracts with multiple performance obligations — The majority of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative SSP basis. For deliverables that we routinely sell separately, such as software maintenance subscriptions and support subscriptions on our core offerings, we determine SSP by evaluating the standalone sales over the trailing 12 months. For those that are not sold routinely, we determine SSP based on our overall pricing trends and objectives, taking into consideration market conditions and other factors, including the value of our contracts, the products sold, and geographic locations. Contract balances — The timing of revenue recognition may differ from the timing of invoicing to customers. Our customers are typically invoiced upfront, including invoices for multi-year subscriptions, with payment terms of 30-45 days. In certain circumstances, customers may be invoiced under alternative payment arrangements, including installment billings. Invoices issued under these arrangements generally have payment terms of 30-45 days. We assess credit losses on contract balances by taking into consideration past collection experience, the credit quality of the customer, the age of the receivable balance, current and future economic conditions, and forecasts that may affect the collectibility of the reported amount. Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. A receivable is recognized in the period in which we deliver goods or provide services, or when our right to consideration is unconditional. The balance of accounts receivable, net of allowance for credit losses, as of July 31, 2025 and 2026, is presented in the accompanying consolidated balance sheets. 95 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) In situations where the revenue recognized on a contract exceeds billings, and our right to consideration is conditional on something other than the passage of time, we record a contract asset. A contract asset becomes a receivable when invoiced, at which point the right to consideration becomes unconditional. As of July 31, 2026, our consolidated balance sheets included current contract assets of $ 97.0 million , included in prepaid expenses and other current assets, and non-current contract assets of $ 96.4 million , included in other assets—non-current. Our current and non-current contract assets were no t material as of July 31, 2025. Costs to obtain and fulfill a contract — We capitalize commissions paid to sales personnel and the related payroll taxes when customer contracts are signed. These costs are recorded as deferred commissions in our consolidated balance sheets, current and non-current. We determine whether costs should be deferred based on our sales compensation plans if the commissions are incremental and would not have been incurred absent the execution of the customer contract. Commissions paid upon the initial acquisition of a contract are recognized over the estimated period of benefit, which may exceed the term of the initial contract if the commissions expected to be paid upon renewal are not commensurate with that of the initial contract. Accordingly, deferred costs are recognized on a systematic basis that is consistent with the pattern of revenue recognition allocated to each performance obligation over the entire period of benefit and included in sales and marketing expense in our consolidated statements of operations. We determine the estimated period of benefit by evaluating the expected renewals of customer contracts, the duration of relationships with our customers, customer retention data, our technology development lifecycle, and other factors. Deferred costs are periodically reviewed for impairment. Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a net basis in our consolidated statements of operations. Deferred revenue — Deferred revenue primarily consists of amounts that have been invoiced but not yet recognized as revenue and primarily pertains to software maintenance subscriptions, support subscriptions and professional services. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet date. Cost of Revenue Cost of revenue consists of cost of product revenue and cost of support, maintenance and other services revenue. Personnel costs associated with our operations and global customer support organizations consist of salaries, benefits and stock-based compensation. Allocated costs consist of certain facilities, depreciation and amortization, recruiting, and information technology costs, allocated based on headcount. Warranties We generally provide a replacement or bug fix warranty for licensed software to conform to our documented specifications for a period of 90 days from initial delivery. With respect to hardware and components within the NX platform, warranty terms from our OEMs generally extend the warranty for repair or replacement for three years . Furthermore, our post-contract customer support ("PCS") agreements provide for the same parts replacement that customers are entitled to under the warranty program, except that replacement parts are delivered according to targeted response times to minimize disruption to the customers’ critical business applications. Substantially all customers purchase PCS agreements. Given the warranty agreement with our OEMs and considering that substantially all products are sold together with PCS agreements, we generally have very limited exposure related to warranty costs and therefore no warranty reserve has been recognized. 96 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Research and Development Our research and development expense consists primarily of product development personnel costs, including salaries and benefits, stock-based compensation and allocated facilities, IT, and recruiting costs. Research and development costs are expensed as incurred. Currently, we expense software development costs as incurred, as from the inception of the product development, our software products are primarily intended to be marketed and sold to customers on-premises, either standalone and/or with other product offerings. Stock-Based Compensation Stock-based compensation expense is measured based on the grant date fair value of share-based awards. The fair value of the purchase rights under our 2016 Employee Stock Purchase Plan ("2016 ESPP") is estimated using the Black-Scholes-Merton ("Black-Scholes") option pricing model, which is impacted by the fair value of our common stock, as well as changes in assumptions regarding a number of subjective variables. These variables include the expected common stock price volatility over the term of the awards, the expected term of the awards, risk-free interest rates, and expected dividend yield. The fair value of restricted stock units ("RSUs") is determined using the fair value of our common stock on the date of grant. The fair value of awards with a market-based condition is measured using a Monte Carlo simulation, which requires the use of various assumptions, including the stock price volatility and risk-free interest rate as of the valuation date corresponding to the length of time remaining in the performance period and expected dividend yield. We grant stock awards that are subject to either standalone service conditions, or a combination of service and performance or market-based conditions. We recognize stock-based compensation expense for employee stock awards with a service condition only using the straight-line method over the requisite service period of the awards, which is generally the vesting period. We use the graded vesting attribution method to recognize stock-based compensation expense related to employee stock awards that contain both service and performance or market-based conditions. The fair value of the 2016 ESPP purchase rights is recognized as expense on a straight-line basis over the offering period. We account for forfeitures of all share-based awards when they occur. Foreign Currency The functional currency of our foreign subsidiaries is the U.S. dollar. Transactions denominated in currencies other than the functional currency are remeasured at the average exchange rate in effect during the reporting period. At the end of each reporting period all monetary assets and liabilities of our subsidiaries are remeasured at the current U.S. dollar exchange rate at the end of the reporting period. Remeasurement gains and losses are included within other expense, net in our consolidated statements of operations. During the fiscal years ended July 31, 2024, 2025 and 2026 , we recognized foreign currency losses of $ 4.3 million, $ 0.9 millio n and $ 12.6 million, re spectively. To date, we have not undertaken any hedging transactions related to foreign currency exposure, but we may do so in the future if our exposure to foreign currency should become more significant. As our international operations evolve, we will continue to reassess our approach to managing our risk relating to fluctuations in currency rates. Segments Our chief operating decision maker is our Chief Executive Officer. This individual allocates resources and assesses financial performance based upon discrete financial information at the consolidated level. Accordingly, we have determined that we operate as a single operating and reportable segment. For additional details, refer to Note 13. 97 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Income Taxes We account for income taxes using the asset and liability method. Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance on amounts that are more likely than not to be realized. We record a liability for uncertain tax positions if it is not more likely than not to be sustained based solely on its technical merits as of the reporting date. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and may not accurately anticipate actual outcomes. Advertising Costs Advertising costs are charged to sales and marketing expense as incurred in our consolidated statements of operations. During the fiscal years ended July 31, 2024, 2025 and 2026 , advertising expense was $ 14.7 million, $ 15.6 million and $ 18.1 million, respectively. Recently Adopted Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (the "FASB") issued accounting standards update ("ASU") 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. We early adopted the new standard during the fiscal quarter ended January 31, 2025 and applied it on a prospective basis. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. We adopted this standard during the fiscal quarter ended July 31, 2025 and applied it on a fully retrospective basis. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which provides for improvements to inc ome tax disclosures. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid by significant jurisdiction. We adopted this standard during the fiscal year ended July 31, 2026 and applied it on a prospective basis. For additional details, refer to Note 12. Recently Issued and Not Yet Adopted Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the statement of operations. This new ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. This ASU will be effective for us beginning in fiscal 2028. We are currently evaluating the impact this new standard will have on our disclosures. 98 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes all references to software development stages and clarifies the threshold entities apply to begin capitalizing costs. This new ASU is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. This ASU will be effective for us beginning in fiscal 2029. We are currently evaluating the impact this new standard will have on our consolidated financial statements. NOTE 2. REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS Disaggregation of Revenue and Revenue Recognition The Nutanix Cloud Platform can be deployed in core data centers, at the edge, or in public clouds, running on a variety of qualified hardware platforms (including our Nutanix-branded NX hardware line), in popular public cloud environments such as Amazon Web Services and Microsoft Azure through Nutanix Cloud Clusters, or, in the case of our cloud-based software and software-as-a-service ("SaaS") offerings, via hosted service. Our subscription term-based licenses are sold separately, or can also be sold alongside configured-to-order servers. Our subscription term-based licenses typically have durations ranging from one to five years . Our cloud-based SaaS subscriptions generally have durations extending up to five years. The following table depicts the disaggregation of revenue by revenue type, consistent with how we evaluate our financial performance: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Subscription $ 2,016,776 $ 2,410,751 $ 2,712,274 Professional services and other (1) 132,040 127,176 141,271 Total revenue $ 2,148,816 $ 2,537,927 $ 2,853,545 (1) Prior to fiscal 2026, these amounts were presented as separate line items, Professional services and Other non-subscription product, as described below. Prior period amounts have been updated to conform to the current period presentation. Subscription revenue — Subscription revenue includes any performance obligation which has a defined duration and is generated from the sales of software maintenance subscriptions, support subscriptions, subscription software licenses and cloud-based SaaS offerings. • Ratable — We recognize revenue from software maintenance subscriptions, support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software maintenance subscriptions and support subscriptions. These offerings represented approximately $ 1,029.0 million , $ 1,138.4 million and $ 1,299.7 million of our subscription revenue for fiscal 2024, 2025 and 2026, respectively. • Upfront — We generally recognize revenue from our subscription software licenses upfront upon the transfer of control to the customer. For sales of our software purchased alongside a server from an OEM or other partner, revenue is typically recognized upon shipment of the server. For software sold separately from a server, revenue is typically recognized when the software is made available to the customer. These subscription software licenses represented approximately $ 987.8 million , $ 1,272.4 million and $ 1,412.6 million of our subscription revenue for fiscal 2024, 2025 and 2026, respectively. Professional services and other revenue — Includes Professional services revenue and Other non-subscription product revenue, as described below: 99 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) • Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed. Professional services revenue was approximately $ 100.9 million, $ 112.2 million, and $ 126.6 million for fiscal 2024, 2025 and 2026, respectively. • Other non-subscription product revenue — Includes non-portable software revenue and hardware revenue, which were immaterial for the periods presented. Significant changes in the balance of deferred revenue (contract liability) and deferred commissions (contract cost asset) for the periods presented are as follows: Deferred Revenue Deferred Commissions (in thousands) Balance as of July 31, 2024 $ 1,872,706 $ 358,811 Additions 2,777,975 228,378 Revenue/commissions recognized ( 2,537,927 ) ( 244,896 ) Balance as of July 31, 2025 2,112,754 342,293 Additions 3,164,160 275,072 Revenue/commissions recognized ( 2,853,545 ) ( 243,443 ) Balance as of July 31, 2026 $ 2,423,369 $ 373,922 During the fiscal year ended July 31, 2025 , we recognized revenue of approximately $ 863.1 million pertaining to amounts deferred as of July 31, 2024. During the fiscal year ended July 31, 2026 , we recognized revenue of approximately $ 1,054.0 million pertaining to amounts deferred as of July 31, 2025. Many of our contracted but not invoiced performance obligations are subject to cancellation terms. Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenue in future periods and excludes performance obligations that are subject to cancellation terms. As of July 31, 2025 , we had approximately $ 2,692.6 million of remaining performance obligations, of which we expected to recognize approximately 49 % within 12 months, approximately 36 % over the subsequent 13- to 36-month period, and the remainder thereafter. As of July 31, 2026 , we had approximately $ 3,440.4 million of remaining performance obligations, of which we expect to recognize approximately 49 % within 12 months, approximately 38 % over the subsequent 13- to 36-month period, and the remainder thereafter. NOTE 3. FAIR VALUE MEASUREMENTS The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value as follows: • Level I — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; • Level II — Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and • Level III — Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. 100 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Assets Measured at Fair Value on a Recurring Basis Cash Equivalents and Short-Term Investments Our money market funds are classified within Level I due to the highly liquid nature of these assets and have unadjusted inputs, quoted prices in active markets for these assets at the measurement date from the financial institution that carries these investment securities. Our investments in available-for-sale debt securities such as commercial paper, corporate bonds and U.S. government securities are classified within Level II. The fair value of these securities is priced by using inputs based on non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. The fair value of our financial assets measured on a recurring basis is as follows: As of July 31, 2025 Level I Level II Level III Total (in thousands) Financial Assets, Current: Cash equivalents: Money market funds $ 371,762 $ — $ — $ 371,762 U.S. Government securities — 21,703 — 21,703 Commercial paper — 13,068 — 13,068 Short-term investments: Corporate bonds — 647,074 — 647,074 Commercial paper — 163,055 — 163,055 U.S. Government securities — 413,105 — 413,105 Total measured at fair value $ 371,762 $ 1,258,005 $ — $ 1,629,767 Cash 362,969 Total cash, cash equivalents and short-term investments $ 1,992,736 Financial Assets, Non-Current: Convertible note receivable $ — $ — $ 5,460 $ 5,460 As of July 31, 2026 Level I Level II Level III (1) Total (in thousands) Financial Assets, Current: Cash equivalents: Money market funds $ 315,721 $ — $ — $ 315,721 U.S. Government securities — 5,987 — 5,987 Commercial paper — 15,701 — 15,701 Short-term investments: Corporate bonds — 909,507 — 909,507 Commercial paper — 60,581 — 60,581 U.S. Government securities — 614,067 — 614,067 Total measured at fair value $ 315,721 $ 1,605,843 $ — $ 1,921,564 Cash 439,899 Total cash, cash equivalents and short-term investments $ 2,361,463 (1) During the fourth quarter of fiscal 2026, we determined that the fair value of the convertible note received as part of the sale of the Frame Desktop-as-a-Service business, previously considered a Level III financial asset, was zero . As such, we wrote off the asset and recognized a loss of $ 5.5 million within other income (expense) in the consolidated statement of operations for the fiscal year ended July 31 2026. 101 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Financial Instruments Not Recorded at Fair Value on a Recurring Basis We report our financial instruments at fair value, with the exception of the 2027 Notes and 2029 Notes (collectively, the "Notes"). Financial instruments that are not recorded at fair value on a recurring basis are measured at fair value on a quarterly basis for disclosure purposes. The carrying values and estimated fair values of financial instruments not recorded at fair value are as follows: As of July 31, 2025 As of July 31, 2026 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (in thousands) 2027 Notes $ 497,059 $ 695,295 $ 498,410 $ 601,115 2029 Notes 846,759 976,652 850,301 900,528 Total $ 1,343,818 $ 1,671,947 $ 1,348,711 $ 1,501,643 The carrying value of the 2027 Notes as of July 31, 2025 and 2026 was net of unamortized debt issuance costs of $ 2.9 million and $ 1.6 million, respectively. The carrying value of the 2029 Notes as of July 31, 2025 and 2026 was net of unamortized debt issuance costs of $ 15.7 million and $ 12.2 million, respectively. The total estimated fair values of the Notes were determined based on the closing trading price per $ 100 of the Notes as of the last day of trading for the period. We consider the fair values of the Notes to be Level II valuations due to the limited trading activity. NOTE 4. BALANCE SHEET COMPONENTS Short-Term Investments The amortized cost of our short-term investments approximates their fair value. Unrealized losses related to our short-term investments are generally due to interest rate fluctuations, as opposed to credit quality. However, we review individual securities that are in an unrealized loss position in order to evaluate whether or not they have experienced or are expected to experience credit losses that would result in a decline in fair value. As of July 31, 2025 and 2026, unrealized gains and losses from our short-term investments were not material and were not the result of a decline in credit quality. As a result, as of July 31, 2025 and 2026 , we did no t record any credit losses for these investments. The following table summarizes the estimated fair value of our investments in marketable debt securities by their contractual maturity dates: As of July 31, 2026 (in thousands) Due within one year $ 731,572 Due in one to three years 852,583 Total $ 1,584,155 102 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consists of the following: As of July 31, 2025 July 31, 2026 (in thousands) Prepaid operating expenses $ 56,762 $ 66,355 VAT receivables 10,316 13,304 Other current assets 38,313 141,824 Total prepaid expenses and other current assets $ 105,391 $ 221,483 The increase in other current assets from July 31, 2025 to July 31, 2026 was due primarily to the addition of $ 97.0 million of current contract assets related to revenue contracts where revenue recognized exceeds billings. For additional details on contract assets, refer to Note 2. Property and Equipment, Net Property and equipment, net consists of the following: As of Estimated Useful Life July 31, 2025 July 31, 2026 (in months) (in thousands) Computer, production, engineering and other equipment 36 $ 435,564 $ 450,087 Demonstration units 12 59,475 55,796 Leasehold improvements (1) 71,520 80,372 Software (2) 29,152 28,808 Furniture and fixtures 60 15,542 16,954 Total property and equipment, gross 611,253 632,017 Less: accumulated depreciation ( 468,439 ) ( 497,130 ) Total property and equipment, net $ 142,814 $ 134,887 (1) Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the remaining lease term. (2) The estimated useful life of software ranges from 36 to 120 months, representing the period during which the software is expected to contribute, either directly or indirectly, to our future cash flows. Depreciation expense related to our property and equipment was $ 65.6 million, $ 66.3 million and $ 66.8 million for the fiscal years ended July 31, 2024, 2025 and 2026, respectively. 103 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Intangible Assets, Net Intangible assets, net consists of the following: As of July 31, 2025 July 31, 2026 (in thousands) Developed technology $ 79,838 $ 79,838 Customer relationships 11,230 11,230 Trade name 4,200 4,200 Total intangible assets, gross 95,268 95,268 Less: Accumulated amortization of developed technology ( 78,989 ) ( 79,405 ) Accumulated amortization of customer relationships ( 9,464 ) ( 9,826 ) Accumulated amortization of trade name ( 4,200 ) ( 4,200 ) Total accumulated amortization ( 92,653 ) ( 93,431 ) Total intangible assets, net $ 2,615 $ 1,837 Amortization expense related to our intangible assets is recognized in our consolidated statements of operations within product cost of revenue for developed technology and sales and marketing expense for customer relationships and trade name. Amortization expense was $ 3.7 million, $ 2.5 million and $ 0.8 million for the fiscal years ended July 31, 2024, 2025 and 2026, respectively. The changes in the net book value of intangible assets, net are as follows: As of July 31, 2025 2026 (in thousands) Intangible assets, net—beginning balance $ 5,153 $ 2,615 Amortization of intangible assets (1) ( 2,538 ) ( 778 ) Intangible assets, net—ending balance $ 2,615 $ 1,837 (1) Represents amortization expense related to intangible assets recognized during the year in our consolidated statements of operations, within product cost of revenue and sales and marketing expense . The estimated future amortization expense of our intangible assets is as follows: Fiscal Year Ending July 31: Amount (in thousands) 2027 778 2028 353 2029 353 2030 353 2031 — Total $ 1,837 104 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Goodwill There have been no changes to the carrying amount of goodwill during the periods presented. Accrued Compensation and Benefits Accrued compensation and benefits consists of the following: As of July 31, 2025 July 31, 2026 (in thousands) Accrued commissions and taxes $ 51,036 $ 51,053 Accrued bonus 37,654 42,620 Accrued vacation 31,062 34,386 Accrued severance 6,264 32,266 Payroll taxes payable 31,366 27,391 Contributions to ESPP withheld 26,325 23,832 Accrued benefits 17,976 22,964 Accrued wages and taxes 18,846 22,243 Other 9,969 12,426 Total accrued compensation and benefits $ 230,498 $ 269,181 NOTE 5. DEBT 2026 Notes In September 2020, we issued $ 750.0 million in aggregate principal amount of the 2026 Notes to BCPE Nucleon (DE) SPV, LP, an entity affiliated with Bain Capital, LP ("Bain") (the "2026 Notes"). The 2026 Notes bore interest at a rate of 2.50 % per annum, with such interest paid in kind ("PIK") on the 2026 Notes held by Bain through an increase in the principal amount of the 2026 Notes, and that would have been paid in cash on any 2026 Notes transferred to entities that are not affiliated with Bain. Interest on the 2026 Notes accrued from the date of issuance, September 24, 2020, and was added to the principal amount on a semi-annual basis (on March 15 and September 15 of each year). On June 6, 2024, Bain delivered a notice of conversion to convert $ 817.6 million aggregate principal amount of the 2026 Notes, representing all of the outstanding principal amount as of that date. Under the terms of the indenture governing the 2026 Notes, the conversion was settled by paying the $ 817.6 million principal amount in cash and delivering the conversion spread of approximately 16.9 million shares of our Class A common stock. The cash portion was settled using a portion of our existing cash, cash equivalents and short-term investments. The 2026 Notes were converted in accordance with their original terms and conditions. Upon conversion, because the carrying amount of the conversion option was previously reclassified to equity, the unamortized discount remaining at the date of conversion was recognized as interest expense. The remaining carrying amount of the 2026 Notes was reduced by the cash transferred and then recognized in equity, such that no gain or loss was recognized. In addition, the accrued and unpaid interest as of the conversion date was forgiven pursuant to the terms of the indenture and recognized in equity. 105 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table sets forth the total interest expense recognized related to the 2026 Notes: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Interest expense related to amortization of debt discount $ 35,955 $ — $ — Interest expense related to amortization of debt issuance costs 4,107 — — Non-cash interest expense 18,550 — — Interest expense related to conversion of 2026 Notes attributable to debt discount and issuance costs 107,877 — — Total interest expense $ 166,489 $ — $ — Non-cash interest expense was related to the 2.5 % PIK interest that we accrued from the issuance of the 2026 Notes through the conversion date and was recognized within other expense, net in our consolidated statement of operations and other liabilities–non-current in our consolidated balance sheet. The accrued PIK interest was converted to the principal balance of the 2026 Notes at each payment date. 2027 Notes In September 2021, we issued $ 575.0 million in aggregate principal amount of 0.25 % convertible senior notes due 2027 consisting of (i) approximately $ 477.3 million principal amount of 2027 Notes in exchange for approximately $ 416.5 million principal amount of the previously outstanding 0 % convertible senior notes due 2023 (the "2023 Notes") and (ii) approximately $ 97.7 million principal amount of 2027 Notes for cash. The partial exchange of the 2023 Notes and issuance of the 2027 Notes was accounted for as a debt extinguishment. The $ 64.9 million difference between the total reacquisition price paid and the net carrying amount of the 2023 Notes was recognized as a debt extinguishment loss within other expense, net in our consolidated statement of operations. In December 2024, we issued $ 862.5 million in aggregate principal amount of 0.50 % convertible senior notes due 2029, discussed below. We used approximately $ 95.5 million of the net proceeds from the offering to repurchase $ 75.0 million aggregate principal amount of the outstanding 2027 Notes. The repurchase of $ 75.0 million aggregate principal amount of the outstanding 2027 Notes for approximately $ 95.5 million was accounted for as an induced conversion in accordance with ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20). The induced conversion resulted in the recognition of an inducement expense of $ 11.3 million within other income (expense), net in our consolidated statement of operations and a reduction to equity of $ 9.7 million. Subsequent to the completion of this transaction, we had outstanding $ 500.0 million aggregate principal amount of the 2027 Notes. The 2027 Notes bear interest at a rate of 0.25 % per annum, and pay interest semi-annually in arrears on each April 1 and October 1. The 2027 Notes will mature on October 1, 2027, unless earlier converted, redeemed or repurchased. The 2027 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of Class A common stock, at our election. Each $ 1,000 of principal of the 2027 Notes is initially convertible into 17.3192 shares of our Class A common stock, which is equivalent to an initial conversion price of approximately $ 57.74 per share, subject to customary anti-dilution adjustments. Holders of these 2027 Notes may convert their 2027 Notes at their option at any time prior to the close of the business day immediately preceding July 1, 2027, only under the following circumstances: 106 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (1) during any fiscal quarter, and only during such fiscal quarter, if the closing price of our common stock for at least 20 trading days in a period of 30 consecutive trading days ending on, and including, the last trading day of the preceding fiscal quarter is greater than or equal to 130 % of the then applicable conversion price for the 2027 Notes per share of common stock; (2) during the five business day period after any consecutive five trading day period in which, for each trading day of that period, the trading price per $ 1,000 principal amount of 2027 Notes for such trading day was less than 98 % of the product of the closing price of our common stock and the then applicable conversion rate on each such trading day; (3) if we call any or all of the 2027 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date, but only with respect to the 2027 Notes called (or deemed called) for redemption; or (4) upon the occurrence of certain specified corporate events. Upon conversion of the 2027 Notes, we will pay or deliver, as the case may be, cash, shares of our Class A common stock or a combination of cash and shares of Class A common stock, at our election. The conversion rate will be subject to adjustment in certain events, but will not be adjusted for any accrued or unpaid interest. Holders who convert their 2027 Notes in connection with certain corporate events that constitute a "make-whole fundamental change" (as defined in the indenture governing the 2027 Notes) are, under certain circumstances, entitled to an increase in the conversion rate. In addition, if we undergo a "fundamental change" (as defined in the indenture governing the 2027 Notes) prior to the maturity date, holders of the 2027 Notes may require us to repurchase for cash all or a portion of their 2027 Notes at a repurchase price equal to 100 % of the principal amount of the repurchased 2027 Notes, plus accrued and unpaid interest thereon. The 2027 Notes consisted of the following: As of July 31, 2025 July 31, 2026 (in thousands) Principal amounts: Principal $ 500,000 $ 500,000 Unamortized debt issuance costs (1) ( 2,941 ) ( 1,590 ) Net carrying amount $ 497,059 $ 498,410 (1) Included in our consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2027 Notes using the effective interest rate method. The effective interest rate is 0.52 %. As of July 31, 2026, the remaining life of the 2027 Notes was approximately 1.2 years . The following table sets forth the total interest expense recognized related to the 2027 Notes: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Contractual interest expense $ 1,352 $ 1,321 $ 1,251 Interest expense related to amortization of debt issuance costs 1,538 1,420 1,351 Total interest expense $ 2,890 $ 2,741 $ 2,602 107 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2029 Notes In December 2024, we issued $ 862.5 million in aggregate principal amount of 0.50 % convertible senior notes due 2029, including the exercise in full by the initial purchasers of the 2029 Notes of their option to purchase an additional $ 112.5 million principal amount, in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The total net proceeds from the offering were approximately $ 844.6 million, after deducting the initial purchasers’ discount and other debt issuance costs. We used approximately $ 95.5 million of the net proceeds from the offering to repurchase $ 75.0 million aggregate principal amount of the outstanding 2027 Notes and approximately $ 200.0 million of the net proceeds from the offering to repurchase approximately 3.1 million shares of our Class A common stock. The 2029 Notes bear interest at a rate of 0.50 % per annum, payable semi-annually in arrears on each June 15 and December 15, beginning June 15, 2025. The 2029 Notes will mature on December 15, 2029, unless earlier converted, redeemed or repurchased. The 2029 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of Class A common stock, at our election. Each $ 1,000 of principal of the 2029 Notes is initially convertible into 11.6505 shares of our Class A common stock, which is equivalent to an initial conversion price of approximately $ 85.83 per share, subject to customary anti-dilution adjustments. Holders of these 2029 Notes may convert them at their option at any time prior to the close of the business day immediately preceding September 15, 2029, only under the following circumstances: (1) during any fiscal quarter, and only during such fiscal quarter, if the closing price of our common stock for at least 20 trading days in a period of 30 consecutive trading days ending on and including the last trading day of the preceding fiscal quarter is greater than or equal to 130 % of the then applicable conversion price for the 2029 Notes per share of common stock; (2) during the five business day period after any consecutive five trading day period in which, for each trading day of that period, the trading price per $ 1,000 principal amount of 2029 Notes was less than 98 % of the product of the closing price of our common stock and the then applicable conversion rate on each such trading day; (3) if we call any or all of the 2029 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date, but only with respect to the 2029 Notes called (or deemed called) for redemption; or (4) upon the occurrence of certain specified corporate events. Upon conversion of the 2029 Notes, we will pay or deliver, as the case may be, cash, shares of our Class A common stock or a combination of cash and shares of Class A common stock, at our election. The conversion rate will be subject to adjustment in certain events but will not be adjusted for any accrued or unpaid interest. Holders who convert their 2029 Notes in connection with certain corporate events that constitute a "make-whole fundamental change" (as defined in the indenture governing the 2029 Notes) are, under certain circumstances, entitled to an increase in the conversion rate. In addition, if we undergo a "fundamental change" (as defined in the indenture governing the 2029 Notes) prior to the maturity date, holders of the 2029 Notes may require us to repurchase for cash all or a portion of their 2029 Notes at a repurchase price equal to 100 % of the principal amount of the repurchased 2029 Notes, plus accrued and unpaid interest thereon. 108 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The 2029 Notes consisted of the following: As of July 31, 2025 July 31, 2026 (in thousands) Principal amounts: Principal $ 862,500 $ 862,500 Unamortized debt issuance costs (1) ( 15,741 ) ( 12,199 ) Net carrying amount $ 846,759 $ 850,301 (1) Included in our consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2029 Notes using the effective interest rate method. The effective interest rate is 0.93 %. As of July 31, 2026, the remaining life of the 2029 Notes was approximately 3.4 years . The following table sets forth the total interest expense recognized related to the 2029 Notes: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Contractual interest expense $ — $ 2,695 $ 4,323 Interest expense related to amortization of debt issuance costs — 2,196 3,542 Total interest expense $ — $ 4,891 $ 7,865 Revolving Credit Agreement In February 2025, we entered into a revolving credit agreement (the "Revolver") that provides for a senior secured revolving credit facility in an aggregate principal amount of $ 500.0 million, including a $ 25.0 million sublimit for the issuance of letters of credit. The Revolver matures in February 2030, subject to earlier springing maturity under certain circumstances. Borrowings, if any, under the Revolver will bear interest, at our option, at a base rate plus an applicable margin ranging from 0.25 % to 1.25 % based upon our total leverage ratio or a term Secured Overnight Financing Rate (or an alternative currency term rate) plus an applicable margin ranging from 1.25 % to 2.25 % based upon our total leverage ratio. We are also required to pay a commitment fee on the unused portion of the Revolver on a quarterly basis equal to 0.175 % to 0.30 %, depending on our total leverage ratio. The Revolver contains customary affirmative and negative covenants (including a financial covenant and restrictions on liens, investments, indebtedness, fundamental changes, restricted payments, transactions with affiliates, prepayments of subordinated debt and other matters, all subject to certain exceptions). The financial covenant requires us to maintain a total leverage ratio of less than or equal to 3.75 : 1.00 , tested at the end of each fiscal quarter. The financial covenant is subject to a 0.50:1.00 step-up for four fiscal quarters following a material acquisition (as defined in the Revolver). As of July 31, 2026, we were in compliance with the financial covenant associated with the Revolver. As of July 31, 2026 , we had no borrowings and an immaterial amount of letters of credit outstanding under the Revolver. 109 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 6. LEASES We have operating leases for offices, research and development facilities and data centers and finance leases for certain data center equipment. Our leases have remaining lease terms of one year to approximately nine years , some of which include options to renew or terminate. We do not include renewal options in the lease terms for calculating our lease liability, as we are not reasonably certain that we will exercise these renewal options at the time of the lease commencement. Our lease agreements do not contain any residual value guarantees or restrictive covenants. Total operating lease cost was approxim ately $ 38.6 million, $ 37.7 million and $ 45.6 million for the fiscal years ended July 31, 2024, 2025 and 2026, respectively, excluding short-term lease costs, variable lease costs and sublease income, each of which were not material. Variable lease costs primarily include common area maintenance charges. Total finance lease cost was immaterial for the fiscal years ended July 31, 2024, 2025 and 2026. In fiscal 2026, we executed an agreement to reduce the term and payments of a lease for a data center facility. The agreement was accounted for as a lease modification under ASC 842. Accordingly, the lease liability was remeasured resulting in a $ 16.7 million reduction to both the lease liability and right-of-use asset. Supplemental balance sheet information related to our leases is as follows: As of July 31, 2025 July 31, 2026 (in thousands) Operating leases: Operating lease right-of-use assets, gross $ 217,060 $ 264,718 Accumulated amortization ( 82,534 ) ( 100,291 ) Operating lease right-of-use assets, net $ 134,526 $ 164,427 Operating lease liabilities—current $ 23,234 $ 35,713 Operating lease liabilities—non-current 115,754 134,310 Total operating lease liabilities $ 138,988 $ 170,023 Weighted average remaining lease term (in years): 4.5 4.5 Weighted average discount rate: 6.3 % 6.2 % As of July 31, 2025 July 31, 2026 (in thousands) Finance leases: Finance lease right-of-use assets, gross (1) $ 18,288 $ 10,539 Accumulated amortization (1) ( 12,805 ) ( 8,125 ) Finance lease right-of-use assets , net (1) $ 5,483 $ 2,414 Finance lease liabilities—current (2) $ 3,301 $ 1,763 Finance lease liabilities—non-current (3) 2,734 971 Total finance lease liabilities $ 6,035 $ 2,734 Weighted average remaining lease term (in years): 2.0 1.5 Weighted average discount rate: 7.1 % 7.6 % (1) Included in our consolidated balance sheets within property and equipment, net. (2) Included in our consolidated balance sheets within accrued expenses and other current liabilities. (3) Included in our consolidated balance sheets within other liabilities—non-current. 110 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Supplemental cash flow and other information related to our leases is as follows: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 39,973 $ 37,419 $ 41,481 Operating cash flows from finance leases $ 885 $ 614 $ 317 Financing cash flows from finance leases $ 3,601 $ 3,922 $ 3,399 Lease liabilities arising from obtaining right-of-use assets: Operating leases $ 46,153 $ 54,435 $ 64,847 Finance leases $ 1,066 $ — $ — The undiscounted cash flows for our lease liabilities as of July 31, 2026 were as follows: Fiscal Year Ending July 31: Operating Leases Finance Leases Total (in thousands) 2027 $ 45,428 $ 1,908 $ 47,336 2028 46,307 961 47,268 2029 44,063 42 44,105 2030 33,935 — 33,935 2031 10,163 — 10,163 Thereafter 16,918 — 16,918 Total lease payments 196,814 2,911 199,725 Less: imputed interest ( 26,791 ) ( 177 ) ( 26,968 ) Total lease obligation 170,023 2,734 172,757 Less: current lease obligations ( 35,713 ) ( 1,763 ) ( 37,476 ) Long-term lease obligations $ 134,310 $ 971 $ 135,281 As of July 31, 2026 , we had additional operating lease commitments of approximately $ 51.4 million on an undiscounted basis for certain office leases that have not yet commenced. These operating leases will commence during fiscal 2027, with lease terms of approximately seven years . NOTE 7. COMMITMENTS AND CONTINGENCIES Purchase Commitments In the normal course of business, we make commitments with our contract manufacturer to ensure them a minimum level of financial consideration for their investment in our joint solutions. These commitments are based on performance targets or on-hand inventory and non-cancelable purchase orders for non-standard components. We record a charge related to these items when we determine that it is probable a loss will be incurred and we are able to estimate the amount of the loss. Our historical charges have not been material. As of July 31, 2026, we had approximately $ 85.3 million of non-cancelable purchase obligations and other commitments pertaining to our daily business operations, and approximately $ 163.0 million in the form of guarantees to our contract manufacturer. 111 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Guarantees and Indemnifications We have entered into agreements with some of our Partners and customers that contain indemnification provisions in the event of claims alleging that our products infringe the intellectual property rights of a third party. The scope of such indemnification varies, and may include, in certain cases, the ability to cure the indemnification by modifying or replacing the product at our own expense, requiring the return and refund of the infringing product, procuring the right for the partner and customer to continue to use or distribute the product, as applicable, and/or defending the partner or customer against and paying any damages from third-party actions based upon claims of infringement. Other guarantees or indemnification arrangements include guarantees of product and service performance. We have also agreed to indemnify our directors, executive officers and certain other officers for costs associated with any fees, expenses, judgments, fines, and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as a director or officer of our company or that person’s services provided to any other company or enterprise at our request. We maintain director and officer insurance coverage that may enable us to recover a portion of any future amounts paid. The fair value of liabilities related to indemnifications and guarantee provisions are not material and have not had any material impact on our consolidated financial statements to date. Legal Proceedings The U.S. Department of Justice (the "DOJ") has been investigating U.S. federal government IT purchases, including historical conduct by a former employee involving one of our federal customers. After the former employee left our company, we learned that he was charged and pleaded guilty to conspiracy to defraud the United States and wire fraud related to a 2019 procurement that allegedly resulted in a loss to the government. With outside counsel’s assistance, we commenced an internal investigation into the former employee’s and some third-party partners’ activities on procurement opportunities with this customer in several prior fiscal years and identified some historical conduct that appears inconsistent with our Code of Business Conduct and Ethics and related policies. We have been cooperating fully with the DOJ, including responding to a grand jury subpoena. Our internal investigation is ongoing, and we cannot predict the outcome or reasonably estimate any potential loss at this time. At this time, we do not expect this matter to have a material adverse effect on our consolidated results of operations, financial position, or liquidity. On March 17, 2026, Tessell, Inc. and related parties filed a complaint against us and certain current and former officers in the U.S. District Court for the Northern District of California. The complaint asserts claims, including defamation and trade libel, arising from certain public statements made by us in connection with an ongoing intellectual property dispute between the parties, including a press release issued by us in March 2024, and seeks unspecified damages and equitable relief. In May 2026, the court granted the parties' stipulation and ordered that this action be stayed pending the resolution of an arbitration proceeding between the parties concerning intellectual property and related contractual claims arising from the same dispute. We intend to defend the matter vigorously if and when the stay is lifted. At this time, we are unable to predict the ultimate outcome of the lawsuit or estimate the amount or range of any potential loss, if any. We are not currently a party to any other legal proceedings that we believe to be material to our business or financial condition. From time to time, we may become subject to various lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business. 112 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 8. STOCKHOLDERS’ EQUITY We have one class of outst anding common stock consisting of Class A common stock. As of July 31, 2026 , we had 1.0 billion shares of Class A common stock authorized, with a par value of $ 0.000025 per share, and approximately 270.8 million shares issued and outstanding, and 0.2 million shares of preferred stock authorized, with a par value of $ 0.000025 per share, and no shares issued and outstanding. Holders of Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders. Share Repurchases In August 2023, our Board of Directors authorized the repurchase of up to $ 350.0 million of our Class A common stock. In August 2025 and April 2026, our Board of Directors approved increases of $ 350.0 million and $ 750.0 million, respectively, to the share repurchase authorization. Repurchases may be made from time to time through open market purchases, through privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act in accordance with applicable securities laws and other restrictions. The authorization has no expiration date, may be modified, suspended or discontinued at any time, and does not obligate us to repurchase any minimum number of shares. During the fiscal year ended July 31, 2025 , we repurchased approximately 1.6 million shares of Class A common stock in open market transactions at a weighted average price of $ 68.25 per share for an aggregate purchase price of approximately $ 107.4 million under this share repurchase program. During the fiscal year ended July 31, 2026 , we repurchased approximately 9.4 million shares of Class A common stock in open market transactions at a weighted average price of $ 51.24 per share for an aggregate purchase price of approximately $ 482.5 million under this share repurchase program, including shares repurchased under the accelerated share repurchase agreement, discussed below. As of July 31, 2026 , approximately $ 728.9 million remained available for future share repurchases under the authorization. In December 2024, we used approximately $ 200.0 million of the net proceeds from the 2029 Notes offering to repurchase approximately 3.1 million shares of our Class A common stock in private ly negotiated transactions at a purchase price equal to $ 64.78 per share. This share repurchase was executed outside of the existing share repurchase program that was authorized by our Board of Directors in August 2023, described above. For additional details on this transaction, refer to Note 5. In December 2025, we entered into an accelerated share repurchase ("ASR") agreement with Bank of America, N.A. Under the terms of the ASR, we repurchased $ 300.0 million of our Class A common stock, with an initial delivery of approximately 5.0 million shares, representing 80 % of the value of the $ 300.0 million. The ASR program was settled in January 2026, shortly after which Bank of America delivered an additional 0.9 million shares. The final share settlement was based on the volume-weighted average price of our Class A common stock on specified dates during the term of the ASR agreement, less a discount, and less the previously delivered 5.0 million shares. The shares repurchased under the ASR were funded with cash on hand under our existing share repurchase program. We accounted for the ASR as an equity transaction, and at the time of receipt, the shares were included in treasury stock at fair market value as of the corresponding trade date. We reflected the shares received as a repurchase of common stock in the weighted average common shares outstanding calculation for basic and diluted earnings per share. 113 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Common Stock Reserved for Issuance As of July 31, 2026, we had reserved shares of common stock for future issuance as follows: As of July 31, 2026 (in thousands) Shares reserved for future equity grants 15,192 Shares underlying outstanding stock options 1 Shares underlying outstanding restricted stock units 12,097 Shares reserved for future employee stock purchase plan awards 7,671 Total 34,961 NOTE 9. EQUITY INCENTIVE PLANS Stock Plans We have one active equity incentive plan, the Amended and Restated 2016 Equity Incentive Plan (the "2016 Plan"), and two inactive equity incentive plans, the 2010 Stock Plan ("2010 Plan") and the 2011 Stock Plan ("2011 Plan") (collectively, the "Stock Plans"). Our stockholders initially approved the 2016 Plan in March 2016 and it became effective in connection with our initial public offering ("IPO"). As a result, at the time of the IPO, we ceased granting additional stock awards under the 2010 Plan and 2011 Plan and both plans were terminated. Any outstanding stock awards under the 2010 Plan and 2011 Plan remain outstanding, subject to the terms of the applicable plan and award agreements, until such shares are issued under those stock awards, by exercise of stock options or settlement of RSUs, or until those stock awards become vested or expired by their terms. In December 2025, our stockholders approved the amendment and restatement of the 2016 Plan to, among other things, extend the term of the plan, establish a new fixed maximum aggregate share reserve of 19,500,000 shares, and eliminate the annual evergreen feature that automatically increased the share reserve each year. Under the 2016 Plan, we may grant incentive stock options, non-statutory stock options, restricted stock, RSUs, stock appreciation rights, performance units, and performance shares to employees, directors and consultants. As of July 31, 2026 , we had reserved a total of approximately 27.3 million shares for the issuance of equity awards under the Stock Plans, of which approximately 15.2 million shares were still available for grant. Restricted Stock Units RSUs settle into shares of Class A common stock upon vesting. We fund withholding taxes due on the vesting of employee RSUs by net share settlement. The payment of the withheld taxes to the tax authorities is reflected as a financing activity within the consolidated statements of cash flows. Performance RSUs From time to time, we grant RSUs that have both service and performance conditions to our executives and employees ("PRSUs"). Vesting of PRSUs is subject to continuous service and the satisfaction of certain performance targets. While we recognize cumulative stock-based compensation expense for the portion of the awards for which both the service condition has been satisfied and it is probable that the performance conditions will be met, the actual vesting and settlement of PRSUs are subject to the performance conditions actually being met. In January 2024, the Compensation Committee of our Board of Directors approved the grant of approximately 0.3 million PRSUs to our CEO. These PRSUs have a grant date fair value per unit of $ 45.86 and will vest up to 200 % based on achievement of specified annual recurring revenue and free cash flow hurdles over a performance period of approximately 3.6 years, subject to his continuous service as CEO through the vesting date. 114 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Market Stock Units We also grant RSUs that have both service and market-based conditions to our executives and employees ("MSUs"). Vesting of MSUs is subject to continuous service and the satisfaction of certain market-based performance targets. While we recognize cumulative stock-based compensation expense for the portion of the awards for which the service condition has been satisfied, regardless of achievement of the specified targets, the actual vesting and settlement of MSUs are subject to the market-based conditions actually being met. During fiscal 2024, 2025 and 2026, the Compensation Committee of our Board of Directors approved the grant of approximately 0.8 million, 0.4 million and 0.5 million MSUs, respectively, to certain of our executives. These MSUs have a weighted average grant date fair value per unit of approximately $ 47.65 , $ 93.40 and $ 121.44 , respectively, and will vest up to 200 % of the target number of MSUs based upon our total shareholder return relative to the total shareholder return of companies in the Nasdaq Composite Index over a performance period of approximately 3.0 years, 3.0 years and 2.8 years, respectively, subject to continuous service on each vesting date. In January 2024, the Compensation Committee of our Board of Directors approved the grant of approximately 0.2 million MSUs to our CEO. These MSUs have a weighted average grant date fair value of $ 62.85 per unit and will vest up to 200 % based on achievement of specified stock price hurdles at any time during a performance period of approximately 3.6 years, subject to his continuous service as CEO through the vesting date. Below is a summary of RSU activity and PRSU and MSU (collectively, "PSU") activity under the Stock Plans: RSUs PSUs Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares Weighted Average Grant Date Fair Value per Share (in thousands) (in thousands) Outstanding at July 31, 2023 22,814 $ 23.69 1,960 $ 33.49 Granted (1) 9,850 $ 34.22 1,396 $ 49.82 Released (1) ( 10,844 ) $ 25.76 ( 796 ) $ 25.25 Forfeited ( 1,959 ) $ 25.73 ( 246 ) $ 45.15 Outstanding at July 31, 2024 19,861 $ 27.58 2,314 $ 44.94 Granted (1) 5,658 $ 61.62 711 $ 86.81 Released (1) ( 9,526 ) $ 30.16 ( 1,140 ) $ 42.46 Forfeited ( 1,562 ) $ 34.63 ( 72 ) $ 52.48 Outstanding at July 31, 2025 14,431 $ 38.46 1,813 $ 62.63 Granted (1) 5,315 $ 66.10 694 $ 99.27 Released (1) ( 7,903 ) $ 35.64 ( 931 ) $ 44.75 Forfeited ( 1,294 ) $ 46.11 ( 29 ) $ 110.89 Outstanding at July 31, 2026 10,549 $ 53.56 1,547 $ 88.92 (1) For PSUs, includes additional shares granted upon vesting due to achievement over 100 %. The aggregate grant date fair value of RSUs, including PSUs, vested w as $ 299.5 million, $ 335.7 million and $ 323.3 million for the fiscal years ended July 31, 2024, 2025 and 2026, respectively. 115 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Stock Options Our Board of Directors determines the period over which stock options become exercisable and stock options generally vest over a four-year period. Stock options generally expire 10 years from the date of grant. The term of an ISO grant to a 10% stockholder will not exceed five years from the date of the grant. The exercise price of an ISO will not be less than 100 % of the estimated fair value of the shares of common stock underlying the stock option (or 110 % of the estimated fair value in the case of an ISO granted to a 10% stockholder) on the date of grant. The exercise price of an NSO is determined by our Board of Directors at the time of grant and is generally not less than 100 % of the estimated fair value of the shares of common stock underlying the stock option on the date of grant. Below is a summary of stock option activity under the Stock Plans: Fiscal Year Ended July 31, 2024 2025 2026 Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) (in years) (in thousands) (in thousands) (in years) (in thousands) (in thousands) (in years) (in thousands) Outstanding at beginning of period 1,046 $ 6.83 1.1 $ 24,451 258 $ 11.26 0.7 $ 10,138 8 $ 13.11 0.7 $ 492 Options granted — $ — — $ — — $ — Options exercised ( 788 ) $ 5.38 ( 250 ) $ 11.20 ( 7 ) $ 13.23 Options canceled/forfeited — $ — — $ — — $ — Outstanding at end of period 258 $ 11.26 0.7 $ 10,138 8 $ 13.11 0.7 $ 492 1 $ 12.31 0.1 $ 47 Exercisable at end of period 258 $ 11.26 0.7 $ 10,138 8 $ 13.11 0.7 $ 492 1 $ 12.31 0.1 $ 47 The aggregate intrinsic value of stock options exercised during the fiscal years ended July 31, 2024, 2025 and 2026 was $ 37.8 million, $ 13.9 million and $ 0.4 million, respectively. Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of our common stock. Cash received from option exercises was $ 4.2 million, $ 2.8 million and $ 0.1 million for the fiscal years ended July 31, 2024, 2025 and 2026, respectively. There were no stock options that vested during the fiscal years ended July 31, 2024, 2025 or 2026 . We did no t grant any stock options during the fiscal years ended July 31, 2024, 2025 or 2026. Employee Stock Purchase Plan In December 2015, our Board of Directors adopted the 2016 Employee Stock Purchase Plan, which was subsequently amended in January 2016 and September 2016 and approved by our stockholders in March 2016 (the "Original 2016 ESPP"). The Original 2016 ESPP became effective in connection with our IPO. Our stockholders subsequently approved amendments to the Original 2016 ESPP in December 2019 and December 2022 (as amended, the "2016 ESPP"). Under the 2016 ESPP, the maximum number of shares of Class A common stock available for sale is 13.8 million shares. The 2016 ESPP allows eligible employees to purchase shares of our Class A common stock at a discount through payroll deductions of up to 15 % of eligible compensation, subject to caps of $ 25,000 in any calendar year and 1,000 shares on any purchase date. The 2016 ESPP provides for 12-month offering periods, generally beginning in March and September of each year, and each offering period consists of two six-month purchase periods. 116 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) On each purchase date, participating employees will purchase Class A common stock at a price per share equal to 85 % of the lesser of the fair market value of our Class A common stock on (i) the first trading day of the applicable offering period or (ii) the last trading day of each purchase period in the applicable offering period. If the stock price of our Class A common stock on any purchase date in an offering period is lower than the stock price on the enrollment date of that offering period, the offering period will immediately reset after the purchase of shares on such purchase date and automatically roll into a new offering period. During the fiscal year ended July 31, 2026 , approximately 1.5 million shares of common stock were purchased under the 2016 ESPP for an aggregate amount of approximately $ 61.4 million. As of July 31, 2026 , approximately 7.7 million shares were available for future issuance under the 2016 ESPP. We use the Black-Scholes option pricing model to determine the fair value of shares purchased under the 2016 ESPP with the following weighted average assumptions on the date of grant: Fiscal Year Ended July 31, 2024 2025 2026 Expected term (in years) 0.78 0.72 0.81 Risk-free interest rate 5.1 % 4.9 % 3.9 % Volatility 47.2 % 46.2 % 47.9 % Dividend yield — % — % — % Stock-Based Compensation Total stock-based compensation expense recognized in our consolidated statements of operations is as follows: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Cost of revenue: Product $ 6,822 $ 2,824 $ 1,550 Support, maintenance and other services 27,285 27,582 28,190 Sales and marketing 80,190 80,930 82,402 Research and development 156,784 175,361 180,844 General and administrative 62,752 64,893 64,681 Total stock-based compensation expense $ 333,833 $ 351,590 $ 357,667 As of July 31, 2026, unrecognized stock-based compensation expense related to outstanding stock awards was approxim ately $ 594.1 million and is expected to be recognized over a weighted average period of approximately 2.0 years. NOTE 10. RESTRUCTURING CHARGES In August 2026, we announced a plan to reduce our global headcount by approximately 5%, following a review of our business structure. This headcount reduction is intended to streamline and realign our organizational structure, improve operational efficiency and agility, and reallocate resources toward strategic priorities and long-term growth objectives. As of July 31, 2026 , we recognized total restructuring charges of approximately $ 27.6 million, which consisted primarily of customary severance and other termination benefits directly related to this reduction in force. Of the approximately $ 27.6 million recognized, $ 3.7 million is included within support, maintenance and other services cost of revenue, $ 17.6 million is included within sales and marketing expense, $ 5.2 million is included within research and development expense, and $ 1.1 million is included within general and administrative expense on our consolidated statements of operations. 117 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) During the fiscal year ended July 31, 2026 , we did no t make any cash payments. As of July 31, 2026 , we had a remaining restructuring liability of approximately $ 27.6 million, included within accrued compensation and benefits and accrued expenses and other current liabilities in our consolidated balance sheet. We expect to incur additional charges of $ 5.4 million to $ 15.4 million related to this reduction in force during fiscal 2027. NOTE 11. NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by factoring in potentially dilutive common stock equivalents outstanding during the period, provided their effect is dilutive. Potentially dilutive common shares include shares issuable upon the exercise of stock options, the vesting of RSUs and PSUs, each purchase under the 2016 ESPP, and common stock issuable upon the conversion of convertible debt under the if-converted method. In loss periods, basic net loss per share and diluted net loss per share are the same, as the effect of potential common shares is antidilutive and therefore excluded. The computation of basic and diluted net income (loss) per share attributable to common stockholders is as follows: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands, except per share data) Numerator: Net (loss) income $ ( 124,775 ) $ 188,366 $ 1,506,837 Add: Interest expense related to convertible senior notes, net of tax — 3,173 4,403 Diluted net (loss) income $ ( 124,775 ) $ 191,539 $ 1,511,240 Denominator: Weighted average shares, basic 244,743 267,479 268,691 Add: Dilutive effect of common stock equivalents — 26,604 23,492 Weighted average shares, diluted 244,743 294,083 292,183 Net (loss) income per share attributable to Class A common stockholders, basic $ ( 0.51 ) $ 0.70 $ 5.61 Net (loss) income per share attributable to Class A common stockholders, diluted $ ( 0.51 ) $ 0.65 $ 5.17 The following shares of common stock were excluded from the computation of diluted net income (loss) per share for the periods presented, as their effect would have been antidilutive: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Outstanding stock options, RSUs and PSUs 22,433 839 5,906 Employee stock purchase plan 1,148 64 136 Common stock issuable upon the conversion of convertible notes 39,423 — — Total 63,004 903 6,042 Shares that will be issued in connection with our stock awards and shares that will be purchased under the employee stock purchase plan are generally automatically converted into shares of our Class A common stock. Common stock issuable upon the conversion of convertible notes represents the antidilutive impact of the 2026 Notes and 2027 Notes under the if-converted method. 118 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 12. INCOME TAXES Income Taxes (Loss) income before provision for (benefit from) income taxes by fiscal year consisted of the following: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Domestic $ ( 167,745 ) $ 118,516 $ 221,988 Foreign 66,427 93,132 105,120 (Loss) income before provision for (benefit from) income taxes $ ( 101,318 ) $ 211,648 $ 327,108 Provision for (benefit from) income taxes by fiscal year consisted of the following: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) Current: U.S. federal $ — $ 1,489 $ 16 State and local 2,052 3,774 3,173 Foreign 23,925 21,657 17,029 Total current taxes 25,977 26,920 20,218 Deferred: U.S. federal 24 24 ( 1,091,757 ) State and local — — ( 104,005 ) Foreign ( 2,544 ) ( 3,662 ) ( 4,185 ) Total deferred taxes ( 2,520 ) ( 3,638 ) ( 1,199,947 ) Provision for (benefit from) income taxes $ 23,457 $ 23,282 $ ( 1,179,729 ) 119 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A reconciliation of the benefit from income taxes to the amount computed by applying the 21 % statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows: Fiscal Year Ended July 31, 2026 (in thousands) U.S. federal income tax at statutory rate $ 68,710 21.0 % State and local income taxes (1) ( 100,832 ) ( 30.8 )% Foreign tax effects 7,118 2.2 % Effect of cross-border tax laws Effect of foreign branches 20,852 6.4 % Tax credit Foreign tax credits ( 35,593 ) ( 10.9 )% Research and development tax credits ( 28,110 ) ( 8.6 )% Changes in valuation allowances (2) ( 1,093,034 ) ( 334.1 )% Nontaxable or nondeductible items Stock-based compensation ( 19,807 ) ( 6.1 )% Other 5,703 1.7 % Changes in unrecognized tax benefits ( 3,793 ) ( 1.2 )% Other adjustments ( 943 ) ( 0.3 )% Effective tax rate $ ( 1,179,729 ) ( 360.7 )% (1) State taxes in California, Illinois, Minnesota, New York, Maryland, and Georgia make up the majority (greater than 50 %) of this category. State taxes include the one-time release of a $ 114.0 million valuation allowance from state deferred tax assets, other than California R&D. (2) During the fiscal year ended July 31, 2026, we recorded a $ 1,094.2 million tax benefit related to the release of our valuation allowance on U.S. federal deferred tax assets, partially offset by $ 1.2 million of tax expense related to the increase in the valuation allowance for capital losses generated during fiscal 2026. For the fiscal years ended July 31, 2024 and 2025, the provision for income taxes differs from the amount computed by applying the statutory federal income tax rate, in accordance with the guidance prior to the adoption of ASU 2023-09, as follows: Fiscal Year Ended July 31, 2024 2025 (in thousands) U.S. federal income tax at statutory rate $ ( 21,277 ) $ 44,446 Change in valuation allowance 115,826 89,264 Stock-based compensation ( 47,632 ) ( 67,782 ) Effect of foreign operations ( 2,553 ) ( 7,111 ) Research and development tax credits ( 30,076 ) ( 41,597 ) Non-deductible expenses 4,704 3,413 Change in unrecognized tax benefit 2,840 ( 4,977 ) State income taxes 2,052 3,774 Tax impact of debt conversion — 2,383 Other ( 427 ) 1,469 Total $ 23,457 $ 23,282 During the fiscal years ended July 31, 2024 and 2025, our provision for income taxes was primarily attributable to foreign tax provisions in certain foreign jurisdictions in which we conduct business. During the fiscal year ended July 31, 2026, our benefit from income taxes was primarily attributable to the release of our valuation allowance on the majority of our U.S. federal and state deferred tax assets. 120 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table summarizes income taxes paid, net of refunds, exceeding five percent of total income taxes paid, net of refunds, in the following jurisdictions: Fiscal Year Ended July 31, 2026 (in thousands) U.S. state and local $ 3,095 Foreign Netherlands 5,192 India 13,446 Other 7,942 Total cash taxes paid, net of refund $ 29,675 The temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows: As of July 31, 2025 2026 (in thousands) Deferred tax assets: Net operating loss carryforward $ 416,176 $ 393,829 Tax credit carryforward 365,828 431,457 Deferred revenue 213,308 237,076 Capitalized research expenses 356,927 287,895 Leases 41,364 48,739 Accruals and reserves 30,940 44,979 Stock-based compensation 17,573 18,176 Intangibles and goodwill 8,044 7,330 Property and equipment — 2,034 Other assets 26,434 26,610 Total deferred tax assets 1,476,594 1,498,125 Deferred tax liabilities: Deferred commission expense ( 79,757 ) ( 87,572 ) Leases ( 41,294 ) ( 47,581 ) Prepaid expenses ( 2,387 ) ( 2,412 ) Property and equipment ( 911 ) — Intangibles and goodwill ( 1,504 ) ( 1,649 ) Other ( 15,984 ) ( 18,985 ) Total deferred tax liabilities ( 141,837 ) ( 158,199 ) Valuation allowance ( 1,318,056 ) ( 124,378 ) Net deferred tax assets $ 16,701 $ 1,215,548 We regularly assess the need for a valuation allowance against our deferred tax assets based on historical taxable income, projected future taxable income, and the expected timing of the reversals of existing taxable temporary differences by jurisdiction. Ultimately, the realization of deferred tax assets is dependent upon the generation of future taxable income during those periods in which temporary differences become deductible and/or tax credits and tax loss carry-forwards can be utilized. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of deferred tax assets to determine, based on the weight of all available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will be realized. 121 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) As of July 31, 2026, we reported a cumulative three-year U.S. pre-tax profit and sustained profitability in recent operating periods. This information is both objective and verifiable; thereby representing strong positive evidence that carries significant weight. In addition, based on our available financial forecast, we expect continuing profitability in the U.S. We also considered forecasts of future taxable income and evaluated the utilization of net operating loss and tax credit carryforwards prior to their expiration. Based on all available positive and negative evidence, including the objective and verifiable positive evidence as described above and anticipated future earnings, we concluded it is more-likely-than-not that a majority of our U.S. federal and state deferred tax assets will be realizable. We continue to maintain a valuation allowance against the California R&D credits as of July 31, 2026, as we expect California R&D tax credit generation to exceed our ability to use these credits in future periods. The valuation allowance on deferred tax assets was $ 1.3 billion and $ 124.4 million as of July 31, 2025 and 2026, respectively. The net change in the total valuation allowance for the fiscal years ended July 31, 2025 and 2026 was an increase of $ 112.3 million and a decrease of $ 1,193.7 million, respectively. As of July 31, 2026 , we had approximately $ 1.7 billion of federal net operating loss carryforwards and $ 1.3 billion of state net operating loss carryforwards available to reduce future taxable income, which will begin to expire in fiscal 2027. In addition, we had approximately $ 246.3 million of federal research credit carryforwards, $ 183.7 million of state research credit carryforwards and $ 93.2 million of foreign tax credit carryforwards available to reduce future tax liability. The federal credits will begin to expire in fiscal 2035 and the state credits can be carried forward indefinitely. The foreign credits will begin to expire in fiscal 2029. Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. Any annual limitation may result in the expiration of net operating losses and credits before utilization. If an ownership change occurred, utilization of the net operating loss and tax credit carryforwards could be significantly reduced. We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries, as such earnings are to be reinvested offshore indefinitely. It is not practicable to estimate the withholding tax liability if these earnings were to be repatriated. We recognize un certain tax positions in our financial statements if that position will more likely than not be sustained on audit, based on the technical merits of the position. A reconciliation of our unrecognized tax benefits, excluding accrued interest and penalties, is as follows: Fiscal Year Ended July 31, 2025 2026 (in thousands) Balance at the beginning of the year $ 102,647 $ 110,178 Increases related to current year tax positions 9,651 10,357 Increases related to prior year tax positions 1,670 6,438 Decreases related to prior year tax positions ( 144 ) ( 3,464 ) Lapse of statute of limitations/Settlements/Other ( 3,646 ) ( 9,966 ) Balance at the end of the year $ 110,178 $ 113,543 As of July 31, 2026 , if uncertain tax positions are fully recognized in the future, it would result in a $ 79.6 million impact to our effective tax rate and the remaining amount would result in adjustments to deferred tax assets and corresponding adjustments to the valuation allowance. We recognize interest and/or penalties related to income tax matters as a component of income tax expense. As of July 31, 2026 , we had recognized $ 1.0 million of accrued interest and penalties related to uncertain tax positions. During the fiscal year ended July 31, 2026, we recognized a tax benefit of $ 7.0 million related to interest and penalties. 122 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) We file income tax returns in the U.S. federal jurisdiction as well as various U.S. states and foreign jurisdictions. The tax years 2009 and forward remain open to examination by the major jurisdictions in which we are subject to tax. These fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized. We are subject to the continuous examination of income tax returns by various tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the provision for income taxes. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations. The Organisation for Economic Co-operation and Development has established a framework for a global minimum corporate tax of 15 %, known as Pillar Two, which will be applied on a country-by-country basis to companies with global revenues and profits above certain thresholds. Although the United States has not enacted legislation to adopt Pillar Two, and its future adoption is uncertain, several countries where we operate have enacted such legislation, and others are in the process of doing so. We do not expect Pillar Two to have a material impact on our effective tax rate or our financial condition and results of operations. The One Big Beautiful Bill Act ("OBBBA") includes significant changes to U.S. income tax laws, including the repeal of mandatory capitalization of domestic research and development expenditures, extensions of bonus depreciation, and modifications to the international tax regimes. The effects of these provisions have been evaluated and reflected in our income tax provision for the fiscal year ended July 31, 2026. NOTE 13. SEGMENT INFORMATION Our chief operating decision maker ("CODM") is our Chief Executive Officer, who reviews financial information presented on a consolidated basis. Accordingly, we have a single operating and reportable segment. The CODM uses net income, as reported on our consolidated statements of operations, as the measure of segment profit or loss to allocate resources and evaluate financial performance. The significant expenses regularly provided to the CODM are those expenses presented in our consolidated statements of operations and related notes to consolidated financial statements. There is no expense or asset information that is supplemental to the information disclosed in these consolidated financial statements. The following table sets forth revenue by geographic location based on bill-to location: Fiscal Year Ended July 31, 2024 2025 2026 (in thousands) United States $ 1,189,213 $ 1,409,367 $ 1,530,445 Europe, the Middle East and Africa 563,281 685,569 831,422 Asia Pacific 348,952 392,744 417,787 Other Americas 47,370 50,247 73,891 Total revenue $ 2,148,816 $ 2,537,927 $ 2,853,545 For the fiscal years ended July 31, 2024, 2025 and 2026 , no individual country, other than the United States, accounted for more than 10 % of total revenue. 123 Table of Contents NUTANIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table sets forth long-lived assets, which primarily include property and equipment, net, by geographic location: As of July 31, 2025 July 31, 2026 (in thousands) United States $ 108,921 $ 100,018 International 33,893 34,869 Total long-lived assets $ 142,814 $ 134,887 124 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.