Nutanix Reports Third Quarter Fiscal 2026 Financial Results

Reports 15% YoY ARR Growth and Solid Free Cash Flow Performance

Delivers Outperformance Across All Guided Metrics

SAN JOSE, Calif., May 27, 2026 (GLOBE NEWSWIRE) -- Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced financial results for its third quarter ended April 30, 2026.

“We saw solid demand in the third quarter, including strong bookings, healthy new logo additions, and good free cash flow performance,” said Rajiv Ramaswami, CEO of Nutanix. “We also announced significant new innovations and partnerships in the areas of AI, modern applications and support for external storage, which will help us pursue the substantial market opportunity in front of us.”

“Our business performed well in our third quarter, as reflected in results that exceeded the high end of the range for all of our guided metrics,” said Rukmini Sivaraman, CFO of Nutanix. “We are pleased to raise our full year guidance and remain focused on driving sustainable growth and improving profitability.”

Third Quarter Fiscal 2026 Financial Summary

 Q3 FY’26Q3 FY’25Y/Y Change
Annual Recurring Revenue (ARR)1$2.43 billion$2.12 billion15%
Average Contract Duration23.4 years3.1 years0.3 years
Revenue$703.1 million$639.0 million10%
GAAP Gross Margin86.9%87.0%(10) bps
Non-GAAP Gross Margin87.8%88.2%(40) bps
GAAP Operating Expenses$540.3 million$507.3 million6.5%
Non-GAAP Operating Expenses$460.5 million$426.5 million8.0%
GAAP Operating Income$70.5 million$48.6 million$21.9 million
Non-GAAP Operating Income$156.5 million$137.1 million$19.4 million
GAAP Operating Margin10.0%7.6%240 bps
Non-GAAP Operating Margin22.3%21.5%80 bps
Net Cash Provided by Operating Activities$207.5 million$218.5 million($11.0) million
Free Cash Flow$197.2 million$203.4 million($6.2) million


Reconciliations between GAAP and non-GAAP financial measures and key performance measures, to the extent available, are provided in the tables of this press release.

Recent Company Highlights

Fourth Quarter Fiscal 2026 Outlook

  
Revenue$725 - $745 million
Non-GAAP Operating Margin21% to 23%
Weighted Average Shares Outstanding (Diluted)3Approximately 292 million


Fiscal 2026 Outlook

  
Revenue$2.82 - $2.84 billion
Non-GAAP Operating MarginApproximately 22.5%
Free Cash Flow$760 - $780 million


Supplementary materials to this press release, including our third quarter fiscal 2026 earnings presentation, can be found at https://ir.nutanix.com/financial/quarterly-results.

Webcast and Conference Call Information

Nutanix executives will discuss the Company’s third quarter fiscal 2026 financial results on a conference call today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time. Interested parties may access the conference call by registering at this link to receive dial in details and a unique PIN number. The conference call will also be webcast live on the Nutanix Investor Relations website at ir.nutanix.com. An archived replay of the webcast will be available on the Nutanix Investor Relations website at ir.nutanix.com shortly after the call.

Footnotes

1Annual Recurring Revenue, or ARR, is defined as the sum of ACV for all subscription contracts from all customers in effect as of the end of a specific period, assuming any subscription contract that expires is renewed on its existing terms. ARR excludes the value of professional services, non-portable software and support contracts and hardware sales. For the purposes of this calculation, we generally assume that the contract term begins on the date when the software is made available to the customer. ACV is defined as the total annualized value of a contract. The total annualized value for a contract is calculated by dividing the total value of the contract by the number of years in the term of such contract. Beginning with the first quarter of fiscal 2026, our methodology for calculating ARR was updated to align more closely with the timing of when licenses are made available to customers. For comparability purposes, ARR for all prior periods have been adjusted to conform to the updated methodology.

2Average Contract Duration represents the dollar-weighted term, calculated on a billings basis, across all subscription contracts, as well as our limited number of life-of-device contracts, using an assumed term of five years for life-of-device licenses, executed in the period.

3Weighted average share count used in computing diluted non-GAAP net income per share.

Non-GAAP Financial Measures and Other Key Performance Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, this press release includes the following non-GAAP financial and other key performance measures: non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, free cash flow, Annual Recurring Revenue (or ARR), and Average Contract Duration. In computing non-GAAP financial measures, we exclude certain items such as stock-based compensation, costs associated with our acquisitions (such as amortization of acquired intangible assets and other acquisition-related costs), litigation settlement accruals and legal fees related to certain litigation matters, the amortization of the debt discount and issuance costs related to debt, interest expense related to debt, inducement expense related to the repurchase of convertible senior notes, and other non-recurring transactions and the related tax impact. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, and non-GAAP operating margin are financial measures which we believe provide useful information to investors because they provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures such as stock-based compensation expense that may not be indicative of our ongoing core business operating results. Free cash flow is a performance measure that we believe provides useful information to our management and investors about the amount of cash generated by the business after capital expenditures, and we define free cash flow as net cash provided by operating activities less purchases of property and equipment. ARR is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the top-line growth of our subscription business (including our ability to acquire subscriptions with new customers and to retain and expand with existing customers), while normalizing for differences in contract durations. Our calculation of ARR is not adjusted for the impact of any known or projected future events (such as customer cancellations, expansion or contraction of existing customers relationships or price increases or decreases) that may cause any subscription contract not to be renewed on its existing terms. ARR is a performance measure that should be viewed independently of revenue and does not represent our revenue under GAAP on an annualized basis or a forecast of GAAP revenue. Investors should not place undue reliance on ARR as an indicator of our future or expected results. ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled performance measures presented by other companies. We use these non-GAAP financial and key performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. However, these non-GAAP financial and key performance measures have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, and free cash flow are not substitutes for gross margin, operating expenses, operating income, operating margin, and net cash provided by operating activities, respectively. There is no GAAP measure that is comparable to ARR or Average Contract Duration, so we have not reconciled the ARR or Average Contract Duration data included in this press release to any GAAP measure. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures and key performance measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures and key performance measures as tools for comparison. We urge you to review the reconciliation of our non-GAAP financial measures and key performance measures to the most directly comparable GAAP financial measures included below in the tables captioned “Reconciliation of GAAP to Non-GAAP Profit Measures” and “Reconciliation of GAAP Net Cash Provided By Operating Activities to Non-GAAP Free Cash Flow,” and not to rely on any single financial measure to evaluate our business. This press release also includes the following forward-looking non-GAAP financial measures as part of our fourth quarter fiscal 2026 outlook and/or our fiscal 2026 outlook: non-GAAP operating margin and free cash flow. We are unable to reconcile these forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures without unreasonable efforts, as we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact the GAAP financial measures for these periods but would not impact the non-GAAP financial measures.

Forward-Looking Statements

This press release contains express and implied forward-looking statements, including, but not limited to, statements regarding: our business trends, momentum and prospects; our expectations regarding demand for our solutions; our ability to pursue the substantial market opportunity ahead, including through our innovations and partnerships in AI, modern applications and external storage; our focus on driving sustainable growth and improving profitability; our fourth quarter fiscal 2026 outlook; and our fiscal 2026 outlook.

These forward-looking statements are not historical facts and instead are based on our current expectations, estimates, opinions, and beliefs. Consequently, you should not rely on these forward-looking statements. The accuracy of these forward-looking statements depends upon future events and involves risks, uncertainties, and other factors, including factors that may be beyond our control, that may cause these statements to be inaccurate and cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by such statements, including, among others: the inherent uncertainty or assumptions and estimates underlying our projections and guidance, which are necessarily speculative in nature; supply chain constraints, component availability and related impacts on the timing of orders, shipments and customer deployments; any failure to successfully implement or realize the full benefits of, or unexpected difficulties or delays in successfully implementing or realizing the full benefits of, our business plans, strategies, initiatives, vision, objectives, momentum, prospects and outlook; our ability to achieve, sustain and/or manage future growth effectively; the rapid evolution of the markets in which we compete, including the introduction, or acceleration of adoption of, competing solutions, including public cloud infrastructure; failure to timely and successfully meet our customer needs; delays in or lack of customer or market acceptance of our new solutions, products, services, product features or technology; macroeconomic or geopolitical uncertainty; our ability to attract, recruit, train, retain, and, where applicable, ramp to full productivity, qualified employees and key personnel; factors that could result in the significant fluctuation of our future quarterly operating results (including anticipated changes to our revenue and product mix, the timing and magnitude of orders, shipments and acceptance of our solutions in any given quarter, our ability to attract new and retain existing end-customers, changes in the pricing and availability of certain components of our solutions, and fluctuations in demand and competitive pricing pressures for our solutions); our ability to form new or maintain and strengthen existing strategic alliances and partnerships, as well as our ability to manage any changes thereto; our ability to make share repurchases; and other risks detailed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2025 filed with the U.S. Securities and Exchange Commission, or the SEC, on September 24, 2025 and subsequent quarterly reports. Additional information will be set forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2026, which should be read in conjunction with this press release and the financial results included herein. Our SEC filings are available on the Investor Relations section of our website at ir.nutanix.com and on the SEC's website at www.sec.gov. These forward-looking statements speak only as of the date of this press release and, except as required by law, we assume no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any of these forward-looking statements to reflect actual results or subsequent events or circumstances.

About Nutanix

Nutanix is a hybrid multicloud computing leader, offering organizations a unified software platform for running applications and AI and managing data anywhere. With Nutanix, organizations can simplify operations for traditional and modern applications, freeing them to focus on business goals. Trusted by more than 30,000 customers worldwide, Nutanix helps empower organizations to transform digitally and power hybrid multicloud environments consistently, simply, and cost-effectively. Learn more at www.nutanix.com or follow us on social media.

© 2026 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or unregistered trademarks of Nutanix, Inc. (“Nutanix”) in the United States and other countries. Other brand names or marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release is for informational purposes only and nothing herein constitutes a warranty or other binding commitment by Nutanix.

Investor Contact:
Richard Valera
ir@nutanix.com

Media Contact:
Jennifer Massaro
pr@nutanix.com

  
NUTANIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
    
  As of 
  July 31,
2025		  April 30,
2026		 
  (in thousands) 
Assets      
Current assets:      
Cash and cash equivalents $769,502  $718,812 
Short-term investments  1,223,234   1,299,091 
Accounts receivable, net  337,967   251,588 
Deferred commissions—current  153,072   146,360 
Prepaid expenses and other current assets  105,391   195,669 
Total current assets  2,589,166   2,611,520 
Property and equipment, net  142,814   127,316 
Operating lease right-of-use assets  134,526   175,261 
Deferred commissions—non-current  189,221   191,062 
Intangible assets, net  2,615   2,033 
Goodwill  185,235   185,235 
Other assets—non-current  39,617   126,201 
Total assets $3,283,194  $3,418,628 
Liabilities and Stockholders’ Deficit      
Current liabilities:      
Accounts payable $81,599  $84,382 
Accrued compensation and benefits  230,498   165,336 
Accrued expenses and other current liabilities  24,187   28,199 
Deferred revenue—current  1,054,023   1,154,755 
Operating lease liabilities—current  23,234   37,346 
Total current liabilities  1,413,541   1,470,018 
Deferred revenue—non-current  1,058,731   1,152,223 
Operating lease liabilities—non-current  115,754   144,063 
Convertible senior notes, net  1,343,818   1,347,484 
Other liabilities—non-current  45,870   30,453 
Total liabilities  3,977,714   4,144,241 
Stockholders’ deficit:      
Common stock  7   7 
Additional paid-in capital  4,200,466   4,219,337 
Accumulated other comprehensive income (loss)  700   (307)
Accumulated deficit  (4,895,693)  (4,944,650)
Total stockholders’ deficit  (694,520)  (725,613)
Total liabilities and stockholders’ deficit $3,283,194  $3,418,628 


  
NUTANIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
       
  Three Months Ended
April 30,		  Nine Months Ended
April 30,		 
  2025  2026  2025  2026 
  (in thousands, except per share data) 
Revenue:            
Product $345,479  $364,938  $1,001,585  $1,101,305 
Support, maintenance and other services  293,504   338,128   883,075   995,162 
Total revenue  638,983   703,066   1,884,660   2,096,467 
Cost of revenue:            
Product (1)(2)  6,776   5,816   23,969   15,782 
Support, maintenance and other services (1)  76,215   86,463   226,980   255,240 
Total cost of revenue  82,991   92,279   250,949   271,022 
Gross profit  555,992   610,787   1,633,711   1,825,445 
Operating expenses:            
Sales and marketing (1)(2)  260,402   283,605   775,185   846,381 
Research and development (1)  186,413   196,098   543,157   585,839 
General and administrative (1)  60,532   60,575   174,036   189,244 
Total operating expenses  507,347   540,278   1,492,378   1,621,464 
Income from operations  48,645   70,509   141,333   203,981 
Other income, net  15,954   10,805   25,172   40,412 
Income before provision for income taxes  64,599   81,314   166,505   244,393 
Provision for income taxes  1,236   9,227   16,789   7,188 
Net income $63,363  $72,087  $149,716  $237,205 
Net income per share attributable to Class
A common stockholders, basic		 $0.24  $0.27  $0.56  $0.88 
Net income per share attributable to Class
A common stockholders, diluted		 $0.22  $0.25  $0.52  $0.82 
Weighted average shares used in computing net
income per share attributable to Class A
common stockholders, basic		  267,566   265,950   267,081   268,058 
Weighted average shares used in computing net
income per share attributable to Class A
common stockholders, diluted		  296,804   287,481   292,942   291,992 

__________________________
(1)   Includes the following stock-based compensation expense:

  Three Months Ended
April 30,		  Nine Months Ended
April 30,		 
  2025  2026  2025  2026 
  (in thousands) 
Product cost of revenue $401  $364  $2,425  $1,150 
Support, maintenance and other services cost of revenue  6,623   5,710   20,768   20,132 
Sales and marketing  19,513   19,556   61,558   60,070 
Research and development  42,162   44,757   132,489   135,363 
General and administrative  15,543   12,431   49,179   46,427 
Total stock-based compensation expense $84,242  $82,818  $266,419  $263,142 


(2)   Includes the following amortization of intangible assets:

  Three Months Ended
April 30,		  Nine Months Ended
April 30,		 
  2025  2026  2025  2026 
  (in thousands) 
Product cost of revenue $546  $106  $2,080  $318 
Sales and marketing  89   88   265   264 
Total amortization of intangible assets $635  $194  $2,345  $582 


  
NUTANIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
    
  Nine Months Ended
April 30,		 
  2025  2026 
  (in thousands) 
Cash flows from operating activities:      
Net income $149,716  $237,205 
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization  54,451   53,581 
Stock-based compensation  266,419   263,142 
Amortization of debt discount and issuance costs  2,519   4,085 
Inducement expense from partial repurchase of the 2027 Notes  11,347   — 
Operating lease cost, net of accretion  21,355   25,497 
Other  (4,690)  (7,935)
Changes in operating assets and liabilities:      
Accounts receivable, net  (14,084)  (1,506)
Deferred commissions  31,339   4,870 
Prepaid expenses and other assets  (10,589)  (92,429)
Accounts payable  3,774   3,128 
Accrued compensation and benefits  (10,528)  (53,410)
Accrued expenses and other liabilities  (5,601)  (9,324)
Operating leases, net  (23,640)  (23,812)
Deferred revenue  130,139   198,583 
Net cash provided by operating activities  601,927   601,675 
Cash flows from investing activities:      
Maturities of investments  272,846   607,475 
Purchases of investments  (941,406)  (679,600)
Sales of investments  2,011   2,750 
Purchases of property and equipment  (59,533)  (38,570)
Net cash used in investing activities  (726,082)  (107,945)
Cash flows from financing activities:      
Proceeds from sales of shares through employee equity incentive plans  68,525   61,447 
Taxes paid related to net share settlement of equity awards  (212,919)  (169,402)
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  (257,859)  (433,240)
Other financing activities, net  (2,943)  (2,637)
Net cash provided by (used in) financing activities  341,119   (543,832)
Net increase (decrease) in cash, cash equivalents and restricted cash $216,964  $(50,102)
Cash, cash equivalents and restricted cash—beginning of period  655,662   769,517 
Cash, cash equivalents and restricted cash—end of period $872,626  $719,415 
Restricted cash (1)  27   603 
Cash and cash equivalents—end of period $872,599  $718,812 
Supplemental disclosures of cash flow information:      
Cash paid for income taxes $25,550  $25,972 
Supplemental disclosures of non-cash investing and
financing information:		      
Purchases of property and equipment included in accounts payable and
accrued and other liabilities		 $1,186  $6,601 
Unpaid taxes related to net share settlement of equity awards included
in accrued expenses and other liabilities		 $2,554  $1,672 

_________________________
(1)   Included within prepaid expenses and other current assets and other assets—non-current in the condensed consolidated balance sheets.

Disaggregation of Revenue
(Unaudited)
 
       
  Three Months Ended
April 30,		  Nine Months Ended
April 30,		 
  2025  2026  2025  2026 
  (in thousands) 
Disaggregation of revenue:            
Subscription revenue $609,663  $664,792  $1,794,777  $1,993,163 
Professional services and other revenue (1)  29,320   38,274   89,883   103,304 
Total revenue $638,983  $703,066  $1,884,660  $2,096,467 

_________________________
(1)   Prior to fiscal 2026, these amounts were presented as separate line items, Professional services and Other non-subscription product. Prior period amounts have been updated to conform to the current period presentation.

Annual Recurring Revenue
(Unaudited)
 
    
  As of April 30, 
  2025  2026 
  (in thousands) 
Annual Recurring Revenue (ARR) (1) $2,119,028  $2,434,939 

______________________
(1)   Beginning with the first quarter of fiscal 2026, our methodology for calculating ARR was updated to align more closely with the timing of when licenses are made available to customers. Prior period amounts have been updated to conform to current quarter methodology.

Remaining Performance Obligations
(Unaudited)
 
    
  As of April 30, 
  2025  2026 
  (in thousands) 
Remaining performance obligations:      
Current $1,200,538  $1,504,035 
13-36 months  920,653   1,192,484 
Thereafter  305,548   381,271 
Total $2,426,739  $3,077,790 


  
Reconciliation of GAAP to Non-GAAP Profit Measures
(Unaudited)
 
          
  GAAP  Non-GAAP Adjustments  Non-GAAP 
  Three Months
Ended April 30,
2026		  (1)   (2)   (3)   (4)   (5)   Three Months
Ended April 30,
2026		 
  (in thousands, except percentages and per share data) 
Gross profit $610,787  $6,074   $106   $—   $—   $—   $616,967 
Gross margin  86.9%  0.9%   —    —    —    —    87.8%
Operating expenses:                     
Sales and marketing  283,605   (19,556)   (88)   —    —    —    263,961 
Research and development  196,098   (44,757)   —    —    —    —    151,341 
General and administrative  60,575   (12,431)   —    (2,948)   —    —    45,196 
Total operating expenses  540,278   (76,744)   (88)   (2,948)   —    —    460,498 
Income from operations  70,509   82,818    194    2,948    —    —    156,469 
Operating margin  10.0%  11.9%   —    0.4%   —    —    22.3%
Net income $72,087  $82,818   $194   $2,948   $2,997   $(24,827)  $136,217 
Weighted shares outstanding, basic  265,950                  265,950 
Weighted shares outstanding, diluted (6)  287,481                  287,481 
Net income per share, basic $0.27  $0.31   $-   $0.01   $0.01   $(0.09)  $0.51 
Net income per share, diluted (7) $0.25                 $0.47 

________________________
(1)   Stock-based compensation expense
(2)   Amortization of intangible assets
(3)   Legal fees
(4)   Amortization of debt issuance costs and interest expense related to debt
(5)   Income tax effect of non-GAAP adjustments. We use a long-term projected non-GAAP tax rate of 20% for the purposes of determining our non-GAAP net income and non-GAAP income per share, which is based on our current long-term projections. We believe the use of a long-term projected tax rate of 20% aligns with the non-GAAP measure of profitability, reduces volatility of the non-GAAP tax rate and provides consistency across reporting periods. Our estimated long-term projected tax rate is subject to change for a variety of reasons, including tax law changes in major jurisdictions in which we operate, changes in our geographic earnings mix, or other changes to our strategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate.
(6)   Includes 21,531 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans
(7)   In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back $1,108 of interest expense related to the convertible senior notes

  GAAP  Non-GAAP Adjustments  Non-GAAP 
  Nine Months
Ended April 30,
2026		  (1)   (2)   (3)   (4)   (5)   Nine Months
Ended April 30,
2026		 
  (in thousands, except percentages and per share data) 
Gross profit $1,825,445  $21,282   $318   $—   $—   $—   $1,847,045 
Gross margin  87.1%  1.0%   —    —    —    —    88.1%
Operating expenses:                     
Sales and marketing  846,381   (60,070)   (264)   —    —    —    786,047 
Research and development  585,839   (135,363)   —    —    —    —    450,476 
General and administrative  189,244   (46,427)   —    (9,651)   —    —    133,166 
Total operating expenses  1,621,464   (241,860)   (264)   (9,651)   —    —    1,369,689 
Income from operations  203,981   263,142    582    9,651    —    —    477,356 
Operating margin  9.7%  12.6%   —    0.5%   —    —    22.8%
Net income $237,205  $263,142   $582   $9,651   $8,985   $(98,163)  $421,402 
Weighted shares outstanding, basic  268,058                  268,058 
Weighted shares outstanding, diluted (6)  291,992                  291,992 
Net income per share, basic $0.88  $0.99   $-   $0.04   $0.03   $(0.37)  $1.57 
Net income per share, diluted (7) $0.82                 $1.44 

______________________
(1)   Stock-based compensation expense
(2)   Amortization of intangible assets
(3)   Legal fees
(4)   Amortization of debt issuance costs and interest expense related to debt
(5)   Income tax effect of non-GAAP adjustments. We use a long-term projected non-GAAP tax rate of 20% for the purposes of determining our non-GAAP net income and non-GAAP income per share, which is based on our current long-term projections. We believe the use of a long-term projected tax rate of 20% aligns with the non-GAAP measure of profitability, reduces volatility of the non-GAAP tax rate and provides consistency across reporting periods. Our estimated long-term projected tax rate is subject to change for a variety of reasons, including tax law changes in major jurisdictions in which we operate, changes in our geographic earnings mix, or other changes to our strategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate.
(6)   Includes 23,934 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans
(7)   In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back $3,305 of interest expense related to the convertible senior notes

  GAAP  Non-GAAP Adjustments  Non-GAAP 
  Three Months
Ended April 30,
2025		  (1)   (2)   (3)   (4)   (5)   (6)   Three Months
Ended April 30,
2025		 
  (in thousands, except percentages and per share data) 
Gross profit $555,992  $7,024   $546   $—   $—   $—   $—   $563,562 
Gross margin  87.0%  1.1%   0.1%   —    —    —    —    88.2%
Operating expenses:                        
Sales and marketing  260,402   (19,513)   (89)   —    —    —    —    240,800 
Research and development  186,413   (42,162)   —    —    —    —    —    144,251 
General and administrative  60,532   (15,543)   —    (3,545)   —    —    —    41,444 
Total operating expenses  507,347   (77,218)   (89)   (3,545)   —    —    —    426,495 
Income from operations  48,645   84,242    635    3,545    —    —    —    137,067 
Operating margin  7.6%  13.2%   0.1%   0.6%   —    —    —    21.5%
Net income $63,363  $84,242   $635   $3,545   $(80)  $2,950   $(29,942)  $124,713 
Weighted shares outstanding, basic  267,566                     267,566 
Weighted shares outstanding, diluted (7)  296,804                     296,804 
Net income per share, basic $0.24  $0.32   $-   $0.01   $-   $0.01   $(0.11)  $0.47 
Net income per share, diluted (8) $0.22                    $0.42 

______________________
(1)   Stock-based compensation expense
(2)   Amortization of intangible assets
(3)   Legal fees
(4)   Other
(5)   Amortization of debt issuance costs and interest expense related to convertible senior notes
(6)   Income tax effect of non-GAAP adjustments. We use a long-term projected non-GAAP tax rate of 20% for the purposes of determining our non-GAAP net income and non-GAAP income per share, which is based on our current long-term projections. We believe the use of a long-term projected tax rate of 20% aligns with the non-GAAP measure of profitability, reduces volatility of the non-GAAP tax rate and provides consistency across reporting periods. Our estimated long-term projected tax rate is subject to change for a variety of reasons, including tax law changes in major jurisdictions in which we operate, changes in our geographic earnings mix, or other changes to our strategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate.
(7)   Includes 29,238 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans
(8)   In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back $1,099 of interest expense related to the convertible senior notes

  GAAP  Non-GAAP Adjustments  Non-GAAP 
  Nine Months
Ended April 30,
2025		  (1)   (2)   (3)   (4)   (5)   (6)   (7)   Nine Months
Ended April 30,
2025		 
  (in thousands, except percentages and per share data) 
Gross profit $1,633,711  $23,193   $2,080   $—   $—   $—   $—   $—   $1,658,984 
Gross margin  86.7%  1.2%   0.1%   —    —    —    —    —    88.0%
Operating expenses:                           
Sales and marketing  775,185   (61,558)   (265)   —    —    —    —    —    713,362 
Research and development  543,157   (132,489)   —    —    —    —    —    —    410,668 
General and administrative  174,036   (49,179)   —    (6,480)   —    —    —    —    118,377 
Total operating expenses  1,492,378   (243,226)   (265)   (6,480)   —    —    —    —    1,242,407 
Income from operations  141,333   266,419    2,345    6,480    —    —    —    —    416,577 
Operating margin  7.5%  14.2%   0.1%   0.3%   —    —    —    —    22.1%
Net income $149,716  $266,419   $2,345   $6,480   $(210)  $11,347   $5,369   $(74,862)  $366,604 
Weighted shares outstanding, basic  267,081                        267,081 
Weighted shares outstanding, diluted (8)  292,942                        292,942 
Net income per share, basic $0.56  $1.00   $0.01   $0.02   $-   $0.04   $0.02   $(0.28)  $1.37 
Net income per share, diluted (9) $0.52                       $1.25 

_____________________
(1)   Stock-based compensation expense
(2)   Amortization of intangible assets
(3)   Legal fees
(4)   Other
(5)   Inducement expense related to partial repurchase of the 2027 Notes
(6)   Amortization of debt issuance costs and interest expense related to convertible senior notes
(7)   Income tax effect of non-GAAP adjustments. We use a long-term projected non-GAAP tax rate of 20% for the purposes of determining our non-GAAP net income and non-GAAP income per share, which is based on our current long-term projections. We believe the use of a long-term projected tax rate of 20% aligns with the non-GAAP measure of profitability, reduces volatility of the non-GAAP tax rate and provides consistency across reporting periods. Our estimated long-term projected tax rate is subject to change for a variety of reasons, including tax law changes in major jurisdictions in which we operate, changes in our geographic earnings mix, or other changes to our strategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate.
(8)   Includes 25,861 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equity incentive plans
(9)   In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back $2,074 of interest expense related to the convertible senior notes

Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow
(Unaudited)
 
       
  Three Months Ended
April 30,		  Nine Months Ended
April 30,		 
  2025  2026  2025  2026 
  (in thousands) 
Net cash provided by operating activities $218,506  $207,504  $601,927  $601,675 
Purchases of property and equipment  (15,095)  (10,323)  (59,533)  (38,570)
Free cash flow $203,411  $197,181  $542,394  $563,105 



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05/27/2026 16:01 -0400

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