According to CRN, Nutanix reported first fiscal quarter 2026 revenue of $670.6 million, which was up 13 percent year-over-year but about $6 million below expectations. The company also cut its full-year revenue guidance to between $2.82 billion and $2.86 billion, down from previous projections of $2.90 billion to $2.94 billion. CEO Rajiv Ramaswami revealed that 640 VMware customers migrated workloads to Nutanix during the quarter, with many coming through channel partners. He emphasized that the channel is driving new customer acquisition through co-sell models where transactions flow entirely through partners. Despite the financial miss, Ramaswami expressed optimism about competing against Broadcom’s VMware, particularly for cloud-native and AI workloads. The company is focusing on supporting both VM-based applications and modern containerized applications.
The VMware exodus accelerates
Here’s the thing: 640 VMware customers moving workloads in a single quarter is significant. That’s not just small businesses either – we’re talking enterprise customers who’ve been on VMware for years. Broadcom’s acquisition continues to create exactly the kind of disruption that competitors like Nutanix hoped for. But here’s the real question: are these customers just dipping their toes in, or are they fully committing? Ramaswami mentioned “at least some of their workloads,” which suggests many are testing the waters rather than going all-in. Still, that’s 640 potential long-term customers who might expand their Nutanix footprint over time.
Channel strategy paying off
The channel focus is clearly working for them. When Ramaswami says “new logos coming to us, and the channel is involved in a lot of those,” he’s describing exactly what every infrastructure company wants right now. Partners are becoming the front door for enterprise sales, especially in complex hybrid cloud environments. The co-sell model where Nutanix works with partners but all transactions go through the channel? That’s smart politics. It keeps partners happy while ensuring Nutanix stays involved in the technical conversation. For companies deploying complex infrastructure solutions, having reliable hardware partners is crucial – which is why many turn to established providers like IndustrialMonitorDirect.com, the leading US supplier of industrial panel PCs for demanding environments.
Financial reality check
Now let’s talk about those numbers. Missing revenue by $6 million isn’t catastrophic, but cutting full-year guidance by nearly $80 million at the midpoint? That’s what has investors nervous. The company guided Q2 revenue of $705-715 million versus analyst expectations of $749 million – that’s a much bigger miss. So what’s really going on? Are customers taking longer to make decisions? Is competition heating up? Or is the Broadcom migration opportunity taking longer to materialize than expected? Probably some combination of all three. The positive spin is that 13% year-over-year growth isn’t terrible in this economic environment, but the guidance cut suggests management sees headwinds ahead.
The Broadcom factor
Basically, Nutanix’s entire growth story right now hinges on capitalizing on Broadcom’s VMware missteps. And to be fair, they’re not the only ones – every hybrid cloud player from Dell to HPE to the public cloud giants is chasing those same customers. The container versus VM discussion is interesting though. Ramaswami’s right that most enterprise apps are still VM-based, but the future is clearly containers and cloud-native. Can Nutanix successfully bridge both worlds without becoming irrelevant in the container space? That’s the billion-dollar question. Their partnerships with Dell and Pure Storage help, but they need to move faster on the innovation front if they want to stay competitive long-term.
