UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

~~FORM~~ ~~10-Q~~

~~(Mark One)~~


☒
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, ~~2020~~

2021


☐
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37883

NUTANIX, INC.

(Exact name of registrant as specified in its charter)

Delaware		27-0989767



~~Delaware~~		~~27-0989767~~
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1740 Technology Drive, Suite 150

San Jose, CA 95110

(Address of principal executive offices, including zip code)

(408) 216-8360

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



~~1740 Technology Drive, Suite 150~~
~~San Jose,~~	CA	~~95110~~
~~(Address of principal executive offices, including zip code)~~



~~(408)~~	~~216-8360~~
~~(Registrant's telephone number, including area code)~~



~~Securities registered pursuant to Section 12(b) of the Act:~~
Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.000025 par value per share	NTNX	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February ~~29, 2020,~~28, 2021, the registrant had ~~179,574,838~~193,515,427 shares of Class A common stock, $0.000025 par value per share, and ~~15,078,664~~10,766,100 shares of Class B common stock, $0.000025 par value per share, outstanding.

TABLE OF CONTENTS

			PAGE

			~~PAGE~~
PART I.		FINANCIAL INFORMATION

	Item 1	Financial Statements (Unaudited)	5

	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31 34

	Item 3	Quantitative and Qualitative Disclosures About Market Risk	47 52

	Item 4	Controls and Procedures	47 52

PART II.		OTHER INFORMATION

	Item 1	Legal Proceedings	48 53

	Item 1A	Risk Factors	48 53

	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	81 53

	Item 3	Defaults Upon Senior Securities	81 53

	Item 4	Mine Safety Disclosures	81 53

	Item 5	Other Information	81 53

	Item 6	Exhibits	81 54

EXHIBIT INDEX			82 54
SIGNATURES			83
			55

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains express and implied forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), which statements involve substantial risks and uncertainties. Other than statements of historical fact, all statements contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "plan," "intend," "could," "would," "expect," or words or expressions of similar substance or the negative thereof, that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements included in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:

•

our future billings, revenue, cost of revenue and operating expenses, as well as changes in the cost of product revenue, component costs, product gross margins and support, entitlements and other services revenue and changes in research and development, sales and marketing and general and administrative expenses;

•

our business plans, strategies, initiatives, objectives and outlook, as well as our ability to execute such plans, strategies, initiatives and objectives successfully and in a timely manner, and the benefits and impact of such plans, initiatives and objectives on our business, operations, and financial results, including any impact on our revenue and product mix, average contract term lengths and discounting behavior;

~~our business plans, initiatives and objectives, our ability to execute such plans, initiatives and objectives in a timely manner, and the impact of such plans, initiatives and objectives~~

•

our plans for, and the timing of, any current and future business model transitions, including our ongoing transition to a subscription-based business model, our ability to manage, complete or realize the benefits of such transitions successfully and in a timely manner, and the short-term and long-term impacts of such transitions on our business, operations and financial results;

our plans for, and the timing of, changes to our business model, including our ongoing transition to a subscription-based business model, our ability to manage, complete or realize the benefits of such transitions successfully and in a timely manner, and the short-term and long-term impacts of such transitions on our business, operations and financial results;

•

the timing and potential impact of the COVID-19 pandemic on the global market environment and the IT industry, as well as on our business, operations and financial results, including changes we have made or anticipate making in response to the COVID-19 pandemic, our ability to manage our business during the pandemic, and the position we anticipate being in following the pandemic;

~~the benefits and capabilities of our platform, products, services and technology;~~

•

the benefits and capabilities of our platform, solutions, products, services and technology, including the interoperability and availability of our solutions with and on third-party platforms;

our growth strategy, our ability to effectively achieve and manage our growth, and the amount, timing and impact of any investments to grow our business, including plans to continue to increase demand generation and marketing spending, and continue to invest in our global engineering, research and development and sales and marketing teams;

•

our plans and expectations regarding new solutions, products, services, product features and technology, including those that are still under development or in process;

~~anticipated trends, growth rates and challenges in our business and in the markets in which we operate, including the segmentation and productivity of our sales team;~~

•

our growth strategy, our ability to effectively achieve and manage our growth, and the amount, timing and impact of any investments to grow our business, including any plans to increase or decrease investments in our global engineering, research and development and sales and/or marketing teams;

~~our ability to develop new solutions, product features~~

•

our go-to-market strategy and ~~technology and bring them to market in a timely manner, as well as~~ the impact of any adjustments thereto, including any adjustments to our go-to-market cost structure, in particular, our sales compensation structure, and our plans regarding pricing and packaging of ~~including additional solutions in~~ our product portfolio;

~~market acceptance of new technology and recently introduced solutions;~~

•

the success and impact of our customer, partner, industry, analyst, investor and employee events on our business, including on future pipeline generation;

~~the interoperability and availability of our solutions with and on third-party hardware platforms;~~

•

the impact of our decision to use new or different metrics, or to make adjustments to the metrics we use, to supplement our financial reporting;

~~our ability to increase sales of our solutions, particularly to large enterprise customers;~~

•

our ability to successfully manage or realize the benefits of our Chief Executive Officer transition, as well as the impact thereof on our business, operations and financial results;

~~our ability to attract new end customers and retain and grow sales from our existing end customers;~~

•

anticipated trends, growth rates and challenges in our business and in the markets in which we operate, including the segmentation and productivity of our sales team;

~~our ability to maintain and strengthen our relationships with our channel partners and OEMs, and the impact of any changes to such relationships on our business, operations and financial results;~~

•

market acceptance of new technology and recently introduced solutions;

~~the effects of seasonal trends on our results of operations;~~

•

our ability to increase sales of our solutions, particularly to large enterprise customers;

~~our expectations concerning relationships with third parties, including our ability to compress and stabilize sales cycles;~~

•

our ability to attract new end customers and retain and grow sales from our existing end customers;

~~our ability to maintain, protect and enhance our intellectual property;~~

•

our ability to maintain and strengthen existing strategic alliances and partnerships, including our relationships with our channel partners and original equipment manufacturers, and for any new strategic alliances and partnerships, and the impact of any changes to such relationships on our business, operations and financial results;

~~our exposure to and ability to guard against cyber attacks and other actual or perceived security breaches;~~

•

the effects of seasonal trends on our results of operations;

~~our ability to continue to expand internationally;~~

•

our expectations concerning relationships with third parties, including our ability to compress and stabilize sales cycles;

~~the effects of increased competition in our market and our ability to compete effectively;~~

•

our ability to maintain, protect and enhance our intellectual property;

~~anticipated capital expenditures;~~

•

our exposure to and ability to guard against cyber attacks and other actual or perceived security breaches;

~~future acquisitions or investments in complementary companies, products, services or technologies and the ability to successfully integrate completed acquisitions;~~

•

our ability to continue to expand internationally;

•

the competitive market, including our ability to compete effectively, the competitive advantages of our products, and the effects of increased competition in our market;

our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally, including recent changes in global tax laws;

•

anticipated capital expenditures;

~~macroeconomic and industry trends, projected growth or trend analysis;~~

•

future acquisitions or investments in complementary companies, products, services or technologies and the ability to successfully integrate completed acquisitions;

the impact of events that may be outside of our control, such as political and social unrest, terrorist attacks, hostilities, malicious human acts, climate change, natural disasters (including extreme weather), pandemics or other major public health concerns, including the ongoing outbreak of a respiratory illness caused by the 2019 novel coronavirus that was recently named by the World Health Organization as COVID-19, and other similar events;

•

~~our ability to attract and retain qualified employees and key personnel;~~

•

macroeconomic and industry trends, projected growth or trend analysis;

~~the sufficiency of cash balances to meet cash needs for at least the next 12 months.~~

•

our ability to attract and retain qualified employees and key personnel; and

•

the sufficiency of cash balances to meet cash needs for at least the next 12 months.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs in light of the information currently available to us. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described under the heading "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for our fiscal year ended July 31, 2020 and in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or events and circumstances reflected in the forward-looking statements will be achieved or will occur. The forward-looking statements in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise or publicly release the results of any revision to these forward-looking statements to reflect new information or the occurrence of unanticipated or subsequent events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

	Page

	~~Page~~

Condensed Consolidated Balance Sheets as of July 31, ~~2019~~2020 and January 31, ~~2020~~2021	6

Condensed Consolidated Statements of Operations for the Three and Six Months Ended January 31, ~~2019~~2020 and ~~2020~~2021	7

Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended January 31, ~~2019~~2020 and ~~2020~~2021	8

Condensed Consolidated Statements of Stockholders' Equity (Deficit) for the Three and Six Months Ended January 31, ~~2019~~2020 and ~~2020~~2021	9

Condensed Consolidated Statements of Cash Flows for the Six Months Ended January 31, ~~2019~~2020 and ~~2020~~2021	11

Notes to Condensed Consolidated Financial Statements	12

Note 1: Overview and Basis of Presentation	12
Note 2: Revenue, Deferred Revenue and Deferred Commissions	14
Note 3: Fair Value Measurements	17 16
Note 4: Balance Sheet Components	18
Note 5: Convertible Senior Notes	20 21
Note 6: Leases	23 26
Note 7: Commitments and Contingencies	25 27
Note 8: Stockholders' Equity	26 28
Note 9: Equity Incentive Plans	26 29
Note 10: Income Taxes	29 32
Note 11: Net Loss Per Share	29 32
Note 12: Segment Information	30 33

Table of Contents

NUTANIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	As of
	July 31, 2020			January 31, 2021
	(in thousands, except per share data)
Assets
Current assets:
Cash and cash equivalents	$	318,737		$	298,701
Short-term investments		401,041			990,138
Accounts receivable, net of allowances of $804 and $419, respectively		242,516			164,868
Deferred commissions—current		68,694			92,025
Prepaid expenses and other current assets		63,032			69,994
Total current assets		1,094,020			1,615,726
Property and equipment, net		143,172			131,971
Operating lease right-of-use assets		127,326			121,066
Deferred commissions—non-current		146,834			191,180
Intangible assets, net		49,392			40,702
Goodwill		185,260			185,260
Other assets—non-current		22,543			25,547
Total assets	$	1,768,547		$	2,311,452
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	54,029		$	52,459
Accrued compensation and benefits		109,109			151,014
Accrued expenses and other current liabilities		25,924			26,130
Deferred revenue—current		534,572			578,664
Operating lease liabilities—current		36,569			41,309
Total current liabilities		760,203			849,576
Deferred revenue—non-current		648,869			667,627
Operating lease liabilities—non-current		116,794			107,784
Convertible senior notes, net		490,222			1,011,725
Derivative liability		—			397,290
Other liabilities—non-current		27,436			35,842
Total liabilities		2,043,524			3,069,844
Commitments and contingencies (Note 7)
Stockholders’ deficit:
Preferred stock, par value of $0.000025 per share— 200,000 shares authorized as of July 31, 2020 and January 31, 2021; 0 shares issued and outstanding as of July 31, 2020 and January 31, 2021		0			0
Common stock, par value of $0.000025 per share—1,200,000 (1,000,000 Class A, 200,000 Class B) shares authorized as of July 31, 2020 and January 31, 2021; 201,949 (186,846 Class A and 15,103 Class B) and 204,238 (193,455 Class A and 10,783 Class B) shares issued and outstanding as of July 31, 2020 and January 31, 2021		5			5
Additional paid-in capital		2,245,180			2,386,579
Accumulated other comprehensive income		2,030			557
Accumulated deficit		(2,522,192	)		(3,145,533	)
Total stockholders’ deficit		(274,977	)		(758,392	)
Total liabilities and stockholders’ deficit	$	1,768,547		$	2,311,452

~~(Unaudited)~~

As of
July 31, 2019 January 31, 2020

(in thousands, except per share data)
Assets
Current assets:
Cash and cash equivalents $ 396,678
$ 211,693
Short-term investments 512,156
607,307
Accounts receivable, net 245,475
247,323
Deferred commissions—current 46,238
59,603
Prepaid expenses and other current assets 74,665
65,708
Total current assets 1,275,212
1,191,634
Property and equipment, net 136,962
143,430
Operating lease right-of-use assets⁽¹⁾
—
135,680
Deferred commissions—non-current 107,474
129,531
Intangible assets, net 66,773
58,083
Goodwill 185,180
185,260
Other assets—non-current 14,441
19,698
Total assets $ 1,786,042
$ 1,863,316

Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable $ 74,047
$ 76,542
Accrued compensation and benefits 99,804
119,889
Accrued expenses and other current liabilities⁽¹⁾
28,797
23,874
Deferred revenue—current 396,667
472,680
Operating lease liabilities—current⁽¹⁾
—
31,668
Total current liabilities 599,315

724,653
Deferred revenue—non-current 513,377
583,904
Operating lease liabilities—non-current⁽¹⁾
—
129,420
Convertible senior notes, net 458,910
474,308
Other liabilities—non-current⁽¹⁾
27,547
17,133
Total liabilities 1,599,149

1,929,418
Commitments and contingencies (Note 7)

Stockholders’ equity (deficit):
Preferred stock, par value of $0.000025 per share— 200,000 shares authorized as of July 31, 2019 and January 31, 2020; no shares issued and outstanding as of July 31, 2019 and January 31, 2020 —
—
Common stock, par value of $0.000025 per share—1,200,000 (1,000,000 Class A, 200,000 Class B) shares authorized as of July 31, 2019 and January 31, 2020; 188,595 (168,155 Class A and 20,440 Class B) and 194,654 (179,562 Class A and 15,092 Class B) shares issued and outstanding as of July 31, 2019 and January 31, 2020 5
5
Additional paid-in capital 1,835,528
2,028,928
Accumulated other comprehensive income 669
1,138
Accumulated deficit (1,649,309 ) (2,096,173 )
Total stockholders’ equity (deficit) 186,893

(66,102 )
Total liabilities and stockholders’ equity (deficit) $ 1,786,042

$ 1,863,316


~~(1)~~	During the first quarter of fiscal 2020, we adopted Accounting Standards Update ("ASU") No. 2016-02 using the modified retrospective method and elected the transition option that allowed us not to restate the comparative periods in our condensed consolidated financial statements in the year of adoption. For additional details, refer to Note 1.

See the accompanying notes to condensed consolidated financial statements.

Table of Contents

NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended January 31,						Six Months Ended January 31,
	2020			2021			2020				2021
	(in thousands, except per share data)
Revenue:
Product	$	213,547		$	174,798		$	405,991			$	330,550
Support, entitlements and other services		133,220			171,584			255,544				328,586
Total revenue		346,767			346,382			661,535				659,136
Cost of revenue:
Product		20,676			13,784			41,909				26,598
Support, entitlements and other services		54,547			57,170			105,515				112,315
Total cost of revenue		75,223			70,954			147,424				138,913
Gross profit		271,544			275,428			514,111				520,223
Operating expenses:
Sales and marketing		304,936			261,071			596,774				518,361
Research and development		139,088			135,571			277,294				271,375
General and administrative		34,579			35,034			67,439				68,808
Total operating expenses		478,603			431,676			941,507				858,544
Loss from operations		(207,059	)		(156,248	)		(427,396	)	��		(338,321	)
Other expense, net		(5,863	)		(126,001	)		(10,903	)			(204,733	)
Loss before provision for income taxes		(212,922	)		(282,249	)		(438,299	)			(543,054	)
Provision for income taxes		4,642			5,141			8,565				9,384
Net loss	$	(217,564	)	$	(287,390	)	$	(446,864	)		$	(552,438	)
Net loss per share attributable to Class A and Class B common stockholders—basic and diluted	$	(1.13	)	$	(1.42	)	$	(2.34	)		$	(2.72	)
Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders—basic and diluted		192,727			202,520			191,199				202,798

~~(Unaudited)~~

Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands, except per share data)
Revenue:
Product $ 236,932
$ 213,547
$ 461,278
$ 405,991
Support, entitlements and other services 98,428
133,220
187,365
255,544
Total revenue 335,360
346,767
648,643
661,535
Cost of revenue:
Product 45,966
20,676
85,227
41,909
Support, entitlements and other services 40,016
54,547
74,861
105,515
Total cost of revenue 85,982
75,223
160,088
147,424
Gross profit 249,378
271,544

488,555

514,111
Operating expenses:
Sales and marketing 213,707
304,936
410,204
596,774
Research and development 123,037
139,088
233,568
277,294
General and administrative 28,788
34,579
56,127
67,439
Total operating expenses 365,532
478,603

699,899

941,507
Loss from operations (116,154 ) (207,059 )
(211,344 )
(427,396 )
Other expense, net (4,399 ) (5,863 ) (7,102 ) (10,903 )
Loss before provision for (benefit from) income taxes (120,553 ) (212,922 )
(218,446 )
(438,299 )
Provision for (benefit from) income taxes 2,210
4,642
(1,418 ) 8,565
Net loss $ (122,763 ) $ (217,564 )
$ (217,028 )
$ (446,864 )
Net loss per share attributable to Class A and Class B common stockholders—basic and diluted $ (0.68 ) $ (1.13 )
$ (1.22 )
$ (2.34 )
Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders—basic and diluted 179,445
192,727
177,428
191,199

See the accompanying notes to condensed consolidated financial statements.

Table of Contents

NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	Three Months Ended January 31,						Six Months Ended January 31,
	2020			2021			2020			2021
	(in thousands)
Net loss	$	(217,564	)	$	(287,390	)	$	(446,864	)	$	(552,438	)
Other comprehensive loss, net of tax:
Change in unrealized (loss) gain on available-for-sale securities, net of tax		(96	)		(323	)		469			(1,473	)
Comprehensive loss	$	(217,660	)	$	(287,713	)	$	(446,395	)	$	(553,911	)

~~(Unaudited)~~

Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands)
Net loss $ (122,763 ) $ (217,564 ) $ (217,028 ) $ (446,864 )
Other comprehensive loss, net of tax:
Change in unrealized gain (loss) on available-for-sale securities, net of tax 1,019
(96 ) 853
469
Comprehensive loss $ (121,744 ) $ (217,660 ) $ (216,175 ) $ (446,395 )

See the accompanying notes to condensed consolidated financial statements.

Table of Contents

NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

	Six Months Ended January 31, 2020
	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’ Equity
	Shares		Amount		Capital		Income			Deficit			(Deficit)
	(in thousands)
Balance - July 31, 2019		188,595	$	5	$	1,835,528	$	669		$	(1,649,309	)	$	186,893
Issuance of common stock through employee equity incentive plans		2,620		—		2,608		—			—			2,608
Issuance of common stock from ESPP purchase		959		—		21,337		—			—			21,337
Stock-based compensation		—		—		81,426		—			—			81,426
Other comprehensive income		—		—		—		565			—			565
Net loss		—		—		—		—			(229,300	)		(229,300	)
Balance - October 31, 2019		192,174		5		1,940,899		1,234			(1,878,609	)		63,529
Issuance of common stock through employee equity incentive plans		2,480		—		2,414		—			—			2,414
Stock-based compensation		—		—		85,615		—			—			85,615
Other comprehensive loss		—		—		—		(96	)		—			(96	)
Net loss		—		—		—		—			(217,564	)		(217,564	)
Balance - January 31, 2020		194,654	$	5	$	2,028,928	$	1,138		$	(2,096,173	)	$	(66,102	)

Table of Contents

~~(Unaudited)~~

	Six Months Ended January 31, 2021
	Common Stock					Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares			Amount		Capital			Income			Deficit			Deficit
	(in thousands)
Balance - July 31, 2020		201,949		$	5	$	2,245,180		$	2,030		$	(2,522,192	)	$	(274,977	)
Issuance of common stock through employee equity incentive plans		3,117			—		1,631			—			—			1,631
Issuance of common stock from ESPP purchase		1,456			—		18,070			—			—			18,070
Repurchase and retirement of common stock		(5,176	)		—		(54,176	)		—			(70,903	)		(125,079	)
Stock-based compensation		—			—		89,198			—			—			89,198
Other comprehensive loss		—			—		—			(1,150	)		—			(1,150	)
Net loss		—			—		—			—			(265,048	)		(265,048	)
Balance - October 31, 2020		201,346			5		2,299,903			880			(2,858,143	)		(557,355	)
Issuance of common stock through employee equity incentive plans		2,892			—		2,222			—			—			2,222
Stock-based compensation		—			—		84,454			—			—			84,454
Other comprehensive loss		—			—		—			(323	)		—			(323	)
Net loss		—			—		—			—			(287,390	)		(287,390	)
Balance - January 31, 2021		204,238		$	5	$	2,386,579		$	557		$	(3,145,533	)	$	(758,392	)

Six Months Ended January 31, 2019
Common Stock
Additional
Paid-In
Capital

Accumulated
Other
Comprehensive
Loss

Accumulated
Deficit

Total
Stockholders’
Equity
Shares Amount

(in thousands)
Balance - July 31, 2018 172,858
$ 4
$ 1,355,907
$ (1,002 ) $ (1,028,130 ) $ 326,779
Issuance of common stock through employee equity incentive plans 2,629
—
3,680
—
—
3,680
Issuance of common stock from ESPP purchase 1,128
—
26,318
—
—
26,318
Issuance of common stock in connection with an acquisition 2,451
—
102,978
—
—
102,978
Stock-based compensation —
—
65,925
—
—
65,925
Vesting of early exercised stock options —
—
70
—
—
70
Other comprehensive loss —
—
—
(166 ) —
(166 )
Net loss —
—
—
—
(94,265 ) (94,265 )
Balance - October 31, 2018 179,066
4
1,554,878
(1,168 ) (1,122,395 ) 431,319
Issuance of common stock through employee equity incentive plans 2,968
—
3,341
—
—
3,341
Stock-based compensation —
—
72,565
—
—
72,565
Vesting of early exercised stock options —
—
50
—
—
50
Other comprehensive income —
—
—
1,019
—
1,019
Net loss —
—
—
—
(122,763 ) (122,763 )
Balance - January 31, 2019 182,034
$ 4
$ 1,630,834
$ (149 ) $ (1,245,158 ) $ 385,531

Six Months Ended January 31, 2020
Common Stock
Additional
Paid-In
Capital

Accumulated
Other
Comprehensive Income

Accumulated
Deficit

Total
Stockholders’
Equity (Deficit)
Shares Amount

(in thousands)
Balance - July 31, 2019 188,595
$ 5
$ 1,835,528
$ 669
$ (1,649,309 ) $ 186,893
Issuance of common stock through employee equity incentive plans 2,620
—
2,608
—
—
2,608
Issuance of common stock from ESPP purchase 959
21,337
—
—
21,337
Stock-based compensation —
—
81,426
—
—
81,426
Other comprehensive income —
—
—
565
—
565
Net loss —
—
—
—
(229,300 ) (229,300 )
Balance - October 31, 2019 192,174
5
1,940,899
1,234
(1,878,609 ) 63,529
Issuance of common stock through employee equity incentive plans 2,480
—
2,414
—
—
2,414
Stock-based compensation —
—
85,615
—
—
85,615
Other comprehensive loss —
—
—
(96 ) —
(96 )
Net loss —
—
—
—
(217,564 ) (217,564 )
Balance - January 31, 2020 194,654
$ 5
$ 2,028,928
$ 1,138
$ (2,096,173 ) $ (66,102 )

See the accompanying notes to condensed consolidated financial statements.

Table of Contents

NUTANIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended January 31,
	2020			2021
	(in thousands)
Cash flows from operating activities:
Net loss	$	(446,864	)	$	(552,438	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		45,540			47,087
Stock-based compensation		167,041			173,652
Change in fair value of derivative liability		—			166,380
Amortization of debt discount and issuance costs		15,398			28,796
Operating lease cost, net of accretion		14,539			16,930
Impairment of lease-related assets		3,002			2,822
Non-cash interest expense		—			6,615
Other		(236	)		4,354
Changes in operating assets and liabilities:
Accounts receivable, net		(1,848	)		79,173
Deferred commissions		(35,422	)		(67,677	)
Prepaid expenses and other assets		9,064			(9,217	)
Accounts payable		(3,428	)		(2,602	)
Accrued compensation and benefits		20,085			39,593
Accrued expenses and other liabilities		974			2,100
Operating leases, net		(13,039	)		(16,523	)
Deferred revenue		146,540			61,325
Net cash used in operating activities		(78,654	)		(19,630	)
Cash flows from investing activities:
Maturities of investments		299,380			260,852
Purchases of investments		(416,636	)		(859,576	)
Sales of investments		24,147			2,999
Purchases of property and equipment		(39,451	)		(25,168	)
Net cash used in investing activities		(132,560	)		(620,893	)
Cash flows from financing activities:
Proceeds from sales of shares through employee equity incentive plans		26,486			21,904
Proceeds from the issuance of convertible notes, net of issuance costs		—			723,617
Repurchases of common stock		—			(125,079	)
Net cash provided by financing activities		26,486			620,442
Net decrease in cash, cash equivalents and restricted cash	$	(184,728	)	$	(20,080	)
Cash, cash equivalents and restricted cash—beginning of period		399,520			321,991
Cash, cash equivalents and restricted cash—end of period	$	214,792		$	301,911
Restricted cash ⁽¹⁾		3,099			3,210
Cash and cash equivalents—end of period	$	211,693		$	298,701
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	11,195		$	8,999
Supplemental disclosures of non-cash investing and financing information:
Purchases of property and equipment included in accounts payable and accrued and other liabilities	$	13,997		$	7,621
Finance lease liabilities arising from obtaining right-of-use assets	$	—		$	1,960

~~(Unaudited)~~

Six Months Ended
January 31,
2019 2020

(in thousands)
Cash flows from operating activities:
Net loss $ (217,028 ) $ (446,864 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 35,005
45,540
Stock-based compensation 138,490
167,041
Change in fair value of contingent consideration (795 ) —
Amortization of debt discount and issuance costs 14,415
15,398
Operating lease cost, net of accretion —
14,539
Impairment of lease-related assets —
3,002
Other (1,121 ) (236 )
Changes in operating assets and liabilities:
Accounts receivable, net 13,579
(1,848 )
Deferred commissions (15,655 ) (35,422 )
Prepaid expenses and other assets (16,495 ) 9,064
Accounts payable 7,554
(3,428 )
Accrued compensation and benefits 1,062
20,085
Accrued expenses and other liabilities (19,029 ) 974
Operating leases, net —
(13,039 )
Deferred revenue 148,332
146,540
Net cash provided by (used in) operating activities 88,314
(78,654 )
Cash flows from investing activities:
Maturities of investments 297,596
299,380
Purchases of investments (167,066 ) (416,636 )
Sales of investments —
24,147
Purchases of property and equipment (72,383 ) (39,451 )
Payments for business combinations, net of cash and restricted cash acquired (18,662 ) —
Net cash provided by (used in) investing activities 39,485
(132,560 )
Cash flows from financing activities:
Proceeds from sales of shares through employee equity incentive plans, net of repurchases 33,364
26,486
Payment of debt in conjunction with business combinations (991 ) —
Payment of issuance costs related to convertible senior notes (75 ) —
Net cash provided by financing activities 32,298
26,486
Net increase (decrease) in cash, cash equivalents and restricted cash $ 160,097
$ (184,728 )
Cash, cash equivalents and restricted cash—beginning of period 307,098
399,520
Cash, cash equivalents and restricted cash—end of period $ 467,195
$ 214,792
Restricted cash ⁽¹⁾
1,185
3,099
Cash and cash equivalents—end of period $ 466,010
$ 211,693
Supplemental disclosures of cash flow information:
Cash paid for income taxes $ 24,023
$ 11,195
Supplemental disclosures of non-cash investing and financing information:
Issuance of common stock in connection with business combinations $ 102,978
$ —
Purchases of property and equipment included in accounts payable and accrued liabilities $ 9,026
$ 13,997
Vesting of early exercised stock options $ 120
$ —


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

See the accompanying notes to condensed consolidated financial statements.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. OVERVIEW AND BASIS OF PRESENTATION

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 provide a leading enterprise cloud platform, which we call the Nutanix Hybrid Cloud Platform, that consists of software solutions and cloud services that power ~~many of the world’s business~~our customers' hybrid cloud and multicloud strategies. Our solutions run across private-, hybrid- and multicloud environments, and allow organizations to seamlessly "lift and shift" their workloads, including enterprise applications, ~~by digitizing the traditional silos of enterprise~~high-performance databases, end-user computing. ~~We seek to provide an enterprise~~ and virtual desktop infrastructure ("VDI") services, cloud ~~platform that empowers our customers to unify various clouds - private, public, distributed - into one seamless~~native workloads, and analytics applications, between different cloud allowing enterprises to choose the right cloud for each application. Our enterprise cloud platform natively converges compute, virtualization, storage, networking, desktop and security services into one integrated, simple-to-consume solution, which allows enterprises to simplify the complexities of a multi-cloud environment with automation, cost governance and compliance. environments. Our solutions are primarily sold through channel partners, including distributors, resellers and original equipment manufacturers ("OEMs") (collectively, "Partners"), and delivered directly to our end ~~customers~~.

customers.

Principles of Consolidation and Significant Accounting Policies

The accompanying condensed 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") and are consistent in all material respects with those included in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2019,~~2020, filed with the Securities and Exchange Commission ("SEC") on September ~~24, 2019.~~23, 2020. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements are unaudited, but include all adjustments of a normal recurring nature necessary for a fair presentation of our quarterly results. The ~~condensed~~ consolidated balance sheet as of July 31, ~~2019~~2020 is derived from audited financial statements, however, it does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2019,~~2020, which was filed with the SEC on September ~~24, 2019.~~

23, 2020.

Use of Estimates

The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Such management estimates and assumptions include, but are not limited to, the best estimate of selling prices for products and related support; useful lives and recoverability of intangible assets and property and equipment; allowance for ~~doubtful accounts;~~credit losses; determination of fair value of stock-based awards; accounting for income taxes, including the valuation allowance on deferred tax assets and uncertain tax positions; warranty liability; purchase commitment liabilities to our ~~contract manufacturers and~~ OEMs; sales commissions expense and the period of benefit for deferred commissions; whether an arrangement is or contains a lease; the incremental borrowing rate to measure the present value of operating right-of-use assets and lease liabilities; the inputs used to determine the fair value of the contingent liability associated with the conversion feature of the convertible senior notes due in 2026; 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.

In response to the ongoing and rapidly evolving COVID-19 pandemic, we considered the impact of the estimated economic implications on our critical and significant accounting estimates, including assessment of collectibility of customer contracts, valuation of accounts receivable, provision for purchase commitments to our OEMs and impairment of long-lived assets, right-of-use assets, and deferred commissions.

Concentration of Risk

Concentration of revenue and accounts receivable—We sell our products primarily through our Partners and occasionally directly to end customers. For the three and six months ended January 31, ~~2019~~2020 and ~~2020,~~2021, no end customer accounted for more than 10% of total revenue or accounts receivable.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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
	Three Months Ended January 31,						Six Months Ended January 31,						Accounts Receivable as of
Partners	2020			2021			2020			2021			July 31, 2020			January 31, 2021
Partner A		32	%		34	%		30	%		31	%		33	%		33	%
Partner B		⁽¹	⁾		⁽¹	⁾		⁽¹	⁾		11	%		⁽¹	⁾		11	%
Partner C		⁽¹	⁾		⁽¹	⁾		⁽¹	⁾		⁽¹	⁾		⁽¹	⁾		11	%
Partner D		14	%		13	%		13	%		14	%		16	%		10	%

Revenue
Accounts Receivable
as of
Three Months Ended
January 31, Six Months Ended
January 31,
Partners 2019 2020 2019 2020 July 31,
2019 January 31, 2020
Partner A 23 % 32 % 22 % 30 % 27 % 28 %
Partner B
⁽¹⁾

⁽¹⁾

⁽¹⁾

⁽¹⁾

⁽¹⁾

16 %
Partner C 12 % 14 % 12 % 13 % 18 % 14 %
Partner D
⁽¹⁾

⁽¹⁾

10 %
⁽¹⁾

⁽¹⁾

⁽¹⁾

Partner E 11 %
⁽¹⁾

11 %
⁽¹⁾

⁽¹⁾

⁽¹⁾


(1)	Less than 10%

Summary of Significant Accounting Policies

Except for the accounting ~~policy related to operating lease right-of-use ("ROU") assets and lease liabilities discussed~~for the derivative liability associated with the convertible notes due in ~~the "Recently Adopted Accounting Pronouncements" section~~2026, as described below, there have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2019,~~2020, filed with the SEC on September ~~24, 2019,~~23, 2020, that have had a material impact on our condensed consolidated financial statements.

Derivative Liability

We evaluate convertible notes or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of Accounting Standards Codification ("ASC") 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity. The result of this accounting guidance could result in the fair value of a financial instrument being classified as a derivative instrument and recorded at fair market value at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the condensed consolidated statements of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.

Recently Adopted Accounting Pronouncements

In ~~February~~June 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases ("ASC 842"), which requires the recognition of ROU assets and lease liabilities on the condensed consolidated balance sheets and additional disclosures around key information about leasing arrangements. We adopted the standard effective August 1, 2019, using a modified retrospective transition method. As a result, our consolidated balance sheet as of July 31, 2019 was not restated and continues to be reported under the previous lease standard ("ASC 840"), and is therefore not comparative. We elected the package of practical expedients permitted under the transition guidance, which allowed us to not reassess whether existing arrangements contain leases, not reassess lease classification and not reassess initial direct costs. The standard had a material impact on our condensed consolidated balance sheet, but did not have an impact on our condensed consolidated statement of operations or cash flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases. We recognized ROU assets and lease liabilities of $120.2 million and $142.1 million, respectively, on our condensed consolidated balance sheet on August 1, 2019, which included reclassifying lease incentives, prepaid rent and deferred rent as components of the ROU asset. Refer to Note 6 for additional details.

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 condensed consolidated balance sheet as of January 31, 2020. We did not have any material financing leases in the periods presented.

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. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The difference between the total ROU assets and total lease liabilities recorded as of August 1, 2019 is due primarily to the derecognition of deferred rent liabilities that were included in accrued expenses and other current liabilities and other liabilities—non-current in our consolidated balance sheet as of July 31, 2019. The operating lease ROU asset also includes any lease payments made prior to commencement date and excludes lease incentives. 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.

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

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. For leases which commenced prior to our adoption of ASC 842, we used the IBR as of August 1, 2019. Our lease terms may include renewal options, which are not included 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. Lease costs are recognized on a straight-line basis as operating expenses within our condensed consolidated statements of operations. We present lease payments within cash flows from operations within the condensed consolidated statements of cash flows.

For our operating leases, we elected to account for lease and non-lease components as a single lease component. Additionally, we do not record leases on the condensed consolidated balance sheet that have a lease term of 12 months or less at the lease commencement date.

In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which provides companies with an option to reclassify stranded tax effects resulting from the enactment of the Tax Cuts and Jobs Act ("TCJA") from accumulated other comprehensive income to retained earnings. We adopted the new standard effective August 1, 2019 and the adoption had no impact on our condensed consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarify and amend existing guidance. The new standard is effective for fiscal years beginning after December 15, 2020, with early adoption permitted, including interim reporting periods within those fiscal years. We early adopted the new standard effective November 1, 2019 and the adoption had no impact in our condensed consolidated financial statements.

~~Recently Issued and Not Yet Adopted Accounting Pronouncements~~

~~In June 2016, the FASB issued ASU~~ 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including trade receivables. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The new standard is effective for fiscal years beginning after December 15, 2019, with early adoption permitted, including interim reporting periods within those fiscal years. ASU 2016-13 is effective for us in the first quarter of fiscal 2021. We ~~do not expect the adoption of~~adopted this new standard toeffective August 1, 2020 and the adoption did not have a material impact on our condensed consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the FASB's disclosure framework project. ~~The~~We adopted this new standard is effective August 1, 2020 and the adoption did not have a material impact on our quarterly or annual disclosures.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Recently Issued and Not Yet Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Accounting for ~~fiscal years beginning after December 15, 2019,~~Convertible Instruments and Contracts in an Entity’s Own Equity. Under ASU 2020-06 the embedded conversion features are no longer separated from the host contract for convertible instruments with ~~early adoption permitted, including interim reporting periods within~~conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. By removing those ~~fiscal years.~~separation models, the interest rate of convertible debt instruments typically will be closer to the coupon interest rate. ASU ~~2018-13~~2020-06 also provides for certain disclosures with regard to convertible instruments and associated fair values. ASU 2020-06 is effective for us in the first quarter of fiscal ~~2021.~~2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The FASB specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. As such, we can early adopt this standard beginning in the first quarter of fiscal 2022. We ~~do not expect~~are currently evaluating the potential impact of adoption of this ~~new standard to have a material impact~~guidance on our ~~quarterly or annual disclosures.~~

condensed consolidated financial statements.

NOTE 2. REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS

Disaggregation of Revenue and Revenue Recognition

We generate revenue primarily from the sale of our enterprise cloud platform, which can be delivered pre-installed on an appliance that is configured to order or delivered separately to be utilized on a variety of certified hardware platforms. ~~Software can be delivered separately or on a configured-to-order appliance.~~ When the software license is not portable to other appliances, it ~~generally has a term equal to~~can be used over the life of the associated appliance, while subscription term-based licenses typically have a term of one to five years. Configured-to-order appliances, including our Nutanix-branded NX hardware line, ~~are typically sold through Partners and~~ can be purchased from one of our OEMs or in limited cases, directly from Nutanix. Our enterprise cloud platform is typically purchased with one or more years of support and entitlements, which includes the right to software upgrades and enhancements as well as technical support. A substantial portion of sales are made through channel partners and OEM relationships.

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

The following table depicts the disaggregation of revenue by revenue type, consistent with how we evaluate our financial performance:

	Three Months Ended January 31,				Six Months Ended January 31,
	2020		2021		2020		2021
	(in thousands)
Subscription	$	266,544	$	305,946	$	484,440	$	584,111
Non-portable software		59,131		21,661		136,702		41,704
Hardware		8,542		1,321		18,266		2,050
Professional services		12,550		17,454		22,127		31,271
Total revenue	$	346,767	$	346,382	$	661,535	$	659,136

Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands)
Subscription $ 157,356
$ 266,544
$ 284,332
$ 484,440
Non-portable software 131,621
59,131
278,191
136,702
Hardware 37,919
8,542
70,466
18,266
Professional services 8,464
12,550
15,654
22,127
Total revenue $ 335,360
$ 346,767
$ 648,643
$ 661,535

Subscription revenue — Subscription revenue includes any performance obligation which has a defined term and is generated from the sales of software entitlement and support subscriptions, subscription software licenses and cloud-based software as a service ("SaaS") offerings.

•

Ratable — We recognize revenue from software entitlement and support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlement and support subscriptions. These offerings represented approximately ~~$91.8~~$123.8 million and ~~$174.8~~$238.7 million of our subscription revenue for the three and six months ended January 31, ~~2019~~2020 and approximately ~~$123.8~~$159.2 million and ~~$238.7~~$307.0 million of our subscription revenue for the three and six months ended January 31, ~~2020~~,2021, respectively.

•

Upfront — Revenue from our subscription software licenses is generally recognized upfront upon transfer of control to the customer, which happens when we make the software available to the customer. These subscription software licenses represented approximately ~~$65.6~~$142.7 million and ~~$109.5~~$245.7 million of our subscription revenue for the three and six months ended January 31, ~~2019~~2020 and approximately ~~$142.7~~$146.7 million and ~~$245.7~~$277.1 million of our subscription revenue for the three and six months ended January 31, ~~2020~~,2021, respectively.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Non-portable software revenue — Non-portable software revenue includes sales of our enterprise cloud platform when delivered on a configured-to-order appliance by us or one of our OEM partners. The software licenses associated with these sales are typically non-portable and ~~have a term equal to~~can be used over the life of the appliance on which the software is delivered. Revenue from our non-portable software products is generally recognized upon transfer of control to the customer.

Hardware revenue — In transactions where ~~we deliver~~ the hardware appliance 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. We consider the amount allocated to hardware revenue to be equivalent to the cost of the hardware procured. Hardware revenue is generally recognized upon transfer of control to the customer.

Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed.

Contracts with multiple performance obligations — ~~Some~~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 standalone selling price ("SSP") basis. For deliverables that we routinely sell separately, such as software entitlement 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. Accounts receivable are recorded at the invoiced amount, net of an allowance for ~~doubtful accounts.~~credit losses. A receivable is recognized in the period we deliver goods or provide services, or when our right to consideration is unconditional. In situations where revenue recognition occurs before invoicing, an unbilled receivable is created, which represents a contract asset. Unbilled accounts receivable, included in accounts receivable, net on the condensed consolidated balance sheets, was not material for any of the periods presented.

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Payment terms on invoiced amounts are typically 3030-45 days. 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. The balance of accounts receivable, net of allowance for ~~doubtful accounts,~~credit losses, as of July 31, ~~2019~~2020 and January 31, ~~2020~~2021 is presented in the accompanying condensed consolidated balance sheets.

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 the condensed 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 ~~amortized~~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 ~~original~~initial contract. Accordingly, ~~the amortization of~~ deferred costs isare 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 the condensed 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. Effective August 1, 2020, we changed our sales compensation plans such that commissions paid on subscription software license renewals are not commensurate with commissions paid on the initial contract. Accordingly, commissions paid on initial sales of subscription software licenses are now being recognized in a pattern consistent with the revenue recognition for each performance obligation, including those we expect upon renewal, over the entire period of benefit, rather than only the term of the initial contract, thus resulting in less expense being recognized in the initial contract period.

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 condensed consolidated statements of operations.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Deferred revenue — Deferred revenue primarily consists of amounts that have been invoiced but not yet recognized as revenue and primarily pertain to software entitlement and 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 condensed consolidated balance sheet date.

Significant changes in the balance of deferred revenue (contract liability) and deferred commissions (contract asset) for the periods presented are as follows:

	Deferred Revenue			Deferred Commissions
	(in thousands)
Balance as of July 31, 2020	$	1,183,441		$	215,528
Additions		180,044			67,630
Revenue/commissions recognized		(157,002	)		(39,400	)
Balance as of October 31, 2020		1,206,483			243,758
Additions		211,392			86,009
Revenue/commissions recognized		(171,584	)		(46,562	)
Balance as of January 31, 2021	$	1,246,291		$	283,205

Deferred Revenue Deferred Commissions

(in thousands)
Balance as of July 31, 2019 $ 910,044
$ 153,712
Additions 187,554
57,846
Revenue/commissions recognized (122,324 ) (39,533 )
Balance as of October 31, 2019 975,274
172,025
Additions 214,530
62,790
Revenue/commissions recognized (133,220 ) (45,681 )
Balance as of January 31, 2020 $ 1,056,584
$ 189,134

During the three and six months ended January 31, 2019, we recognized revenue of approximately $85.7 million and $151.6 million pertaining to amounts deferred as of October 31, 2018 and July 31, 2018, respectively.

During the three and six months ended January 31, 2020, we recognized revenue of approximately $119.3 million and $207.5 million pertaining to amounts deferred as of October 31, 2019 and July 31, 2019, respectively.

~~The majority~~ During the three and six months ended January 31, 2021, we recognized revenue of approximately $152.5 million and $272.6 million pertaining to amounts deferred as of October 31, 2020 and July 31, 2020, respectively.

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 ("contracted not 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. Contracted not recognized revenue was approximately ~~$1,077.9~~$1,314.1 million as of January 31, ~~2020,~~2021, of which we expect to recognize approximately ~~45%~~48% over the next 12 months, and the remainder thereafter.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 3. FAIR VALUE MEASUREMENTS

The fair value of our financial assets and liabilities measured on a recurring basis is as follows:

	As of July 31, 2020
	Level I		Level II		Level III		Total
	(in thousands)
Financial Assets:
Cash equivalents:
Money market funds	$	142,936	$	0	$	0	$	142,936
Commercial paper		0		8,999		0		8,999
Short-term investments:
Corporate bonds		0		345,265		0		345,265
Commercial paper		0		29,702		0		29,702
U.S. government securities		0		26,074		0		26,074
Total measured at fair value	$	142,936	$	410,040	$	0	$	552,976
Cash								166,802
Total cash, cash equivalents and short-term investments							$	719,778

	As of January 31, 2021
	Level I		Level II		Level III		Total
	(in thousands)
Financial Assets:
Cash equivalents:
Money market funds	$	32,661	$	0	$	0	$	32,661
Commercial paper		0		67,492		0		67,492
Short-term investments:
Corporate bonds		0		547,316		0		547,316
Commercial paper		0		290,432		0		290,432
U.S. government securities		0		152,390		0		152,390
Total measured at fair value	$	32,661	$	1,057,630	$	0	$	1,090,291
Cash								198,548
Total cash, cash equivalents and short-term investments							$	1,288,839

As of July 31, 2019
Level I Level II Level III
Total

(in thousands)
Financial Assets:
Cash equivalents:
Money market funds $ 33,156
$ —
$ —
$ 33,156
Commercial paper —
103,029
—
103,029
U.S. government securities —
119,933
—
119,933
Corporate bonds —
9,996
—
9,996
Short-term investments:

Corporate bonds —
354,549
—
354,549
Commercial paper —
92,851
—
92,851
U.S. government securities —
64,756
—
64,756
Total measured at fair value $ 33,156

$ 745,114

$ —

$ 778,270
Cash 130,564
Total cash, cash equivalents and short-term investments $ 908,834

As of January 31, 2020
Level I Level II Level III Total

(in thousands)
Financial Assets:
Cash equivalents:
Money market funds $ 29,792
$ —
$ —
$ 29,792
Commercial paper —
3,498
—
3,498
U.S. government securities —
3,670
—
3,670
Corporate bonds —
2,050
—
2,050
Short-term investments:

Corporate bonds —
395,673
—
395,673
Commercial paper —
115,762
—
115,762
U.S. government securities —
95,872
—
95,872
Total measured at fair value $ 29,792
$ 616,525
$ —
$ 646,317
Cash 172,683
Total cash, cash equivalents and short-term investments $ 819,000

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

We report our financial instruments at fair value, with the exception of the 0% ~~Convertible Senior Notes,~~convertible senior notes, due in January 2023, (the "2023 Notes") and the 2.50% convertible senior notes, due in 2026, (the "2026 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, 2020				As of January 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(in thousands)
2023 Notes	$	490,222	$	529,385	$	506,670	$	590,525
2026 Notes		0		0		505,055		1,009,733
Total	$	490,222	$	529,385	$	1,011,725	$	1,600,258

As of July 31, 2019 As of January 31, 2020
Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value

(in thousands)
Convertible senior notes, net $ 458,910
$ 527,275
$ 474,308
$ 580,463

The carrying value of the 2023 Notes as of July 31, 2020 and January 31, ~~2020~~2021 was net of the unamortized debt discount of ~~$95.4~~$80.3 million and $64.7 million, respectively, and unamortized debt issuance costs of $4.5 million and $3.6 million, respectively.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The carrying value of the 2026 Notes as of January 31, 2021 was net of the unamortized debt discount of $219.8 million and unamortized debt issuance costs of ~~$5.3~~$25.1 million.

The total estimated fair value of the 2023 Notes was determined based on the closing trading price per $100 of the 2023 Notes as of the last day of trading for the period. We consider the fair value of the 2023 Notes to be a Level 2 ~~measurement~~valuation due to the limited trading activity.

The total estimated fair value of the 2026 Notes is based on a binomial model. We consider the fair value of the 2026 Notes to be a Level 3 valuation, as the 2026 Notes are not publicly traded. The Level 3 inputs used are the same as those used to determine the estimated fair value of the associated derivative liability, as detailed below.

Derivative Liability

The conversion feature of the 2026 Notes represents an embedded derivative. The 2026 Notes are not considered to be conventional debt and we determined that the embedded conversion feature was required to be bifurcated from the host debt and accounted for as a derivative liability, as the 2026 Notes are convertible into a variable number of shares until the conversion price becomes fixed in September 2021, based on the level of achievement of the associated financial performance metric. As such, the initial fair value of the derivative instrument was recorded as a liability in the condensed consolidated balance sheet with the corresponding amount recorded as a discount to the 2026 Notes upon issuance. The derivative liability is considered a Level 3 valuation and is recorded at its estimated fair value at the end of each reporting period, with the change in fair value recognized within other expense, net in the condensed consolidated statements of operations.

The following table shows the estimated fair value of the derivative liability as of the issuance of the 2026 Notes and the change in fair value from issuance through January 31, 2021:

	Six Months Ended January 31, 2021
	(in thousands)
Derivative liability at issuance of the 2026 Notes	$	230,910
Change in fair value		166,380
Derivative liability, end of period	$	397,290

We estimated the fair value of the derivative liability using a binomial model, with the following valuation inputs:

	As of
	September 24, 2020	January 31, 2021
Conversion ratio ⁽¹⁾	Conversion price of $26.63 with a 37.552 conversion rate per $1,000	Conversion price of $27.75 with a 36.036 conversion rate per $1,000
Risk-free rate	0.4%	0.6%
Discount rate ⁽²⁾	9.0%	6.5%
Volatility	42.7%	42.5%
Stock price	$21.26		$30.52

(1)

The conversion ratio was estimated based on the latest forecast of the associated financial performance metric.

(2)

The discount rate was estimated based on the implied rate for the 2023 Notes as well as a credit analysis.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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, ~~2019~~2020 and January 31, ~~2020,~~2021, unrealized gains and losses from our short-term investments were not ~~material. As of July 31, 2019~~material and ~~January 31, 2020, unrealized losses from securities that were in an unrealized loss position for more than 12 months~~ were not ~~material. Unrealized losses related to our short-term investments are due to interest rate fluctuations, as opposed to~~the result of a decline in credit quality. As a result, at July 31, ~~2019~~2020 and January 31, ~~2020, there were no other-than-temporary impairments~~2021, we did not 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 January 31, 2021
	(in thousands)
Due within one year	$	808,386
Due in one to two years		181,752
Total	$	990,138

As of
January 31, 2020
(in thousands)
Due within one year $ 441,622
Due in one to two years 165,685
Total $ 607,307

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consists of the following:

	As of
	July 31, 2020		January 31, 2021
	(in thousands)
Prepaid operating expenses	$	31,690	$	46,945
VAT receivables		8,381		7,611
Tenant improvement allowance receivables		8,557		—
Other current assets		14,404		15,438
Total prepaid expenses and other current assets	$	63,032	$	69,994

As of
July 31,
2019 January 31,
2020

(in thousands)
Prepaid operating expenses $ 37,864
$ 37,541
Tenant improvement allowances —
7,930
VAT receivables 5,068
6,516
Prepaid income taxes 19,690
1,548
Other current assets 12,043
12,173
Total prepaid expenses and other current assets $ 74,665
$ 65,708

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

The decrease in prepaid expenses and other current assets from July 31, 2019 to January 31, 2020 was due primarily to the receipt of an $18.0 million corporate income tax refund in the first quarter of fiscal 2020, partially offset by the addition of $7.9 million of tenant improvement allowances, which are recorded within prepaid expenses and other current assets on the condensed consolidated balance sheet as of January 31, 2020 as a result of our adoption of ASC 842 during the first quarter of fiscal 2020.

Property and Equipment, Net

Property and equipment, net consists of the following:

			As of
	Estimated Useful Life		July 31, 2020			January 31, 2021
	(in months)		(in thousands)
Computer, production, engineering and other equipment		36	$	245,245		$	268,470
Demonstration units		12		66,569			67,735
Leasehold improvements	⁽¹⁾			65,557			62,623
Furniture and fixtures		60		17,026			16,482
Total property and equipment, gross				394,397			415,310
Less: accumulated depreciation ⁽²⁾				(251,225	)		(283,339	)
Total property and equipment, net			$	143,172		$	131,971

Estimated
Useful Life As of
July 31,
2019 January 31,
2020

(in months) (in thousands)
Computer, production, engineering and other equipment 36 $ 200,762
$ 226,897
Demonstration units 12 59,981
64,190
Leasehold improvements
⁽¹⁾
46,520
54,570
Furniture and fixtures 60 12,868
14,147
Total property and equipment, gross 320,131

359,804
Less: accumulated depreciation ⁽²⁾
(183,169 ) (216,374 )
Total property and equipment, net $ 136,962

$ 143,430


(1)	Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the remaining lease term.

(2)

Includes a ~~$1.2~~$1.2 million write-off related to the impairment of certain leasehold improvements ~~for~~during the fiscal quarter ended January 31, 2020. and a $0.9 million write-off related to the impairment of certain leasehold improvements during the fiscal quarter ended October 31, 2020. For additional information on ~~this~~these lease-related ~~impairment,~~impairments, refer to Note 6.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Depreciation expense related to our property and equipment was ~~$14.5 million and $26.9 million for the three and sixmonths ended January 31, 2019 and~~ $18.7 million and $36.9 million for the three and six months ended January 31, 2020 and $19.2 million and $38.3 million for the three and sixmonths ended January 31, 2021, respectively.

Goodwill and Intangible Assets, Net

~~The~~

There was no change in the carrying value of goodwill during the six months ended January 31, ~~2020 was not material.~~

2021.

Intangible assets, net consists of the following:

	As of
	July 31, 2020			January 31, 2021
	(in thousands)
Developed technology	$	79,300		$	79,300
Customer relationships		8,860			8,860
Trade name		4,170			4,170
Total intangible assets, gross		92,330			92,330
Less:
Accumulated amortization of developed technology		(35,987	)		(43,376	)
Accumulated amortization of customer relationships		(4,953	)		(5,733	)
Accumulated amortization of trade name		(1,998	)		(2,519	)
Total accumulated amortization		(42,938	)		(51,628	)
Total intangible assets, net	$	49,392		$	40,702

As of
July 31,
2019 January 31,
2020

(in thousands)
Developed technology $ 79,300
$ 79,300
Customer relationships 8,860
8,860
Trade name 4,170
4,170
Total intangible assets, gross 92,330
92,330
Less:
Accumulated amortization of developed technology (21,210 ) (28,598 )
Accumulated amortization of customer relationships (3,392 ) (4,172 )
Accumulated amortization of trade name (955 ) (1,477 )
Total accumulated amortization (25,557 ) (34,247 )
Total intangible assets, net $ 66,773
$ 58,083

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Amortization expense related to our intangible assets is being recognized in the condensed consolidated statements of operations within product cost of revenue for developed technology and sales and marketing expense for customer relationships and trade name.

The estimated future amortization expense of our intangible assets is as follows:

Fiscal Year Ending July 31:	Amount
	(in thousands)
2021 (remaining six months)	$	8,690
2022		16,183
2023		10,856
2024		3,210
2025		1,763
Total	$	40,702

Fiscal Year Ending July 31: Amount
(in thousands)
2020 (remaining six months) $ 8,690
2021 17,380
2022 16,183
2023 10,856
2024 3,210
Thereafter 1,764
Total $ 58,083

Accrued Compensation and Benefits

Accrued compensation and benefits consists of the following:

	As of
	July 31, 2020		January 31, 2021
	(in thousands)
Accrued commissions	$	33,503	$	36,878
Contributions to ESPP withheld		16,563		29,852
Accrued vacation		24,006		26,944
Payroll taxes payable		10,742		23,305
Accrued bonus		5,568		12,576
Accrued benefits		8,426		9,531
Other		10,301		11,929
Total accrued compensation and benefits	$	109,109	$	151,014

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consists of the following:

As of
July 31,
2019 January 31,
2020

(in thousands)
Accrued commissions $ 31,703
$ 32,841
Contributions to ESPP withheld 20,778
29,643
Accrued vacation 15,475
19,036
Payroll taxes payable 8,504
11,660
Accrued bonus 11,413
10,612
Other 11,931
16,097
Total accrued compensation and benefits $ 99,804

$ 119,889

	As of
	July 31, 2020		January 31, 2021
	(in thousands)
Income taxes payable	$	9,703	$	8,997
Accrued professional services		3,006		4,079
Other		13,215		13,054
Total accrued expenses and other current liabilities	$	25,924	$	26,130

NOTE 5. CONVERTIBLE SENIOR NOTES

2023 Notes

In January 2018, we issued ~~Convertible Senior~~the 2023 Notes with a 0% interest rate for an aggregate principal amount of $575.0 million, due in 2023, ~~(the "Notes"),~~ in a private placement to qualified institutional buyers pursuant to Rule144A under the Securities Act. This included $75.0 million in aggregate principal amount of the 2023 Notes that we issued resulting from initial purchasers fully exercising their option to purchase additional notes. There are no required principal payments prior to the maturity of the 2023 Notes. The total net proceeds from the 2023 Notes are as follows:

	Amount
	(in thousands)
Principal amount	$	575,000
Less: initial purchasers' discount		(10,781	)
Less: cost of the bond hedges		(143,175	)
Add: proceeds from the sale of warrants		87,975
Less: other issuance costs		(707	)
Net proceeds	$	508,312

The 2023 Notes do not bear any interest and will mature on January 15, 2023, unless earlier converted or repurchased in accordance with their terms. The 2023 Notes are unsecured and do not contain any financial covenants or any restrictions on the payment of dividends, or the issuance or repurchase of securities by us.

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Each $1,000 of principal of the 2023 Notes will initially be convertible into 20.4705 shares of our Class A common stock, which is equivalent to an initial conversion price of approximately $48.85 per share, subject to adjustment upon the occurrence of specified events. Holders of these Notes may convert their Notes at their option at any time prior to the close of the business day immediately preceding October 15, 2022, only under the following circumstances:

during any fiscal quarter commencing after the fiscal quarter ending on April 30, 2018 (and only during such fiscal quarter), if the last reported sale price of our Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130% of the conversion price on each applicable trading day;


2)	during the five business day period after any five consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate for the 2023 Notes on each such trading day; or


3)	upon the occurrence of certain specified corporate events.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Based on the closing price of our Class A common stock of ~~$32.47~~$30.52 on January 31, ~~2020,~~2021, the if-converted value of the 2023 Notes was lower than the principal amount. The price of our Class A common stock was not greater than or equal to 130% of the conversion price for 20 or more trading days during the 30 consecutive trading days ending on the last trading day of the quarter ended January 31, ~~2020.~~2021. As such, the 2023 Notes are not convertible for the fiscal quarter commencing after January 31, ~~2020.~~

2021.

On or after October 15, 2022, holders may convert all or any portion of their Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing conditions.

Upon conversion of the 2023 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. We intend to settle the principal of the 2023 Notes in cash.

The conversion rate will be subject to adjustment in some events, but will not be adjusted for any accrued or unpaid interest. A holder who converts their 2023 Notes in connection with certain corporate events that constitute a "make-whole fundamental change" per the indenture governing the 2023 Notes are, under certain circumstances, entitled to an increase in the conversion rate. In addition, if we undergo a fundamental change prior to the maturity date, holders may require us to repurchase for cash all or a portion of their 2023 Notes at a repurchase price equal to 100% of the principal amount of the repurchased 2023 Notes, plus accrued and unpaid interest.

We may not redeem the 2023 Notes prior to the maturity date, and no sinking fund is provided for the 2023 Notes.

In accounting for the issuance of the 2023 Notes, we separated the 2023 Notes into liability and equity components. The carrying amount of the liability component of approximately $423.4 million was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component of approximately $151.6 million, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the 2023 Notes. The difference between the principal amount of the 2023 Notes and the liability component (the "debt discount") is amortized to interest expense using the effective interest method over the term of the 2023 Notes. The equity component of the 2023 Notes is included in additional paid-in capital in the condensed consolidated balance sheets and is not remeasured as long as it continues to meet the conditions for equity classification.

We incurred transaction costs related to the issuance of the 2023 Notes of approximately $11.5 million, consisting of an initial purchasers' discount of $10.8 million and other issuance costs of approximately $0.7 million. In accounting for the transaction costs, we allocated the total amount incurred to the liability and equity components using the same proportions as the proceeds from the 2023 Notes. Transaction costs attributable to the liability component were approximately $8.5 million, recorded as debt issuance costs (presented as contra debt in the condensed consolidated balance sheets), and are being amortized to interest expense over the term of the 2023 Notes. The transaction costs attributable to the equity component were approximately $3.0 million and were net with the equity component within stockholders’ equity.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The 2023 Notes consisted of the following:

	As of
	July 31, 2020			January 31, 2021
	(in thousands)
Principal amounts:
Principal	$	575,000		$	575,000
Unamortized debt discount⁽¹⁾		(80,298	)		(64,719	)
Unamortized debt issuance costs⁽¹⁾		(4,480	)		(3,611	)
Net carrying amount	$	490,222		$	506,670
Carrying amount of equity component⁽²⁾	$	148,598		$	148,598

As of
July 31,
2019 January 31,
2020

(in thousands)
Principal amounts:
Principal $ 575,000
$ 575,000
Unamortized debt discount ⁽¹⁾
(109,956 ) (95,372 )
Unamortized debt issuance costs ⁽¹⁾
(6,134 ) (5,320 )
Net carrying amount $ 458,910
$ 474,308
Carrying amount of equity component ⁽²⁾
$ 148,598
$ 148,598


(1)	Included in the condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2023 Notes using the effective interest rate method. The effective interest rate is 6.62%.


(2)	Included in the condensed consolidated balance sheets within additional paid-in capital, net of ~~$3.0~~$3.0 million in equity issuance costs.

As of January 31, ~~2020,~~2021, the remaining life of the 2023 Notes was approximately 3523 months.

The following table sets forth the total interest expense recognized related to the 2023 Notes:

	Three Months Ended January 31,				Six Months Ended January 31,
	2020		2021		2020		2021
	(in thousands)
Interest expense related to amortization of debt discount	$	7,352	$	7,854	$	14,584	$	15,579
Interest expense related to amortization of debt issuance costs		411		438		814		869
Total interest expense	$	7,763	$	8,292	$	15,398	$	16,448

Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands)
Interest expense related to amortization of debt discount $ 6,883
$ 7,352
$ 13,653
$ 14,584
Interest expense related to amortization of debt issuance costs 384
411
762
814
Total interest expense $ 7,267

$ 7,763

$ 14,415
$ 15,398

Note Hedges and Warrants

Concurrently with the offering of the 2023 Notes in January 2018, we entered into convertible note hedge transactions with certain bank counterparties, whereby we have the initial option to purchase a total of approximately 11.8 million shares of our Class A common stock at a conversion price of approximately $48.85 per share, subject to adjustment for certain specified events. The total cost of the convertible note hedge transactions was approximately $143.2 million. In addition, we sold warrants to certain bank counterparties, whereby the holders of the warrants have the initial option to purchase a total of approximately 11.8 million shares of our Class A common stock at a price of $73.46 per share, subject to adjustment for certain specified events. We received approximately $88.0 million in cash proceeds from the sale of these warrants.

Taken together, the purchase of the convertible note hedges and the sale of warrants are intended to offset any actual dilution from the conversion of the 2023 Notes and to effectively increase the overall conversion price from $48.85 to $73.46 per share. As these transactions meet certain accounting criteria, the convertible note hedges and warrants are recorded within stockholders’ equity and are not accounted for as derivatives. The net cost incurred in connection with the convertible note hedge and warrant transactions of approximately $55.2 million was recorded as a reduction to additional paid-in capital in the condensed consolidated balance sheets as of July 31, ~~2019~~2020 and January 31, ~~2020.~~2021. The fair value of the note hedges and warrants are not remeasured each reporting period. The amounts paid for the note hedges were tax deductible expenses, while the proceeds received from the warrants were not taxable.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Impact to Earnings per Share

The 2023 Notes will have no impact toon diluted earnings per share ("EPS") until they meet the criteria for conversion, as discussed above, as we intend to settle the principal amount of the 2023 Notes in cash upon conversion. Under the treasury stock method, in periods when we report net income, we are required to include the effect of additional shares that may be issued under the 2023 Notes when the price of our Class A common stock exceeds the conversion price. Under this method, the cumulative dilutive effect of the 2023 Notes would be approximately 3.9 million shares if the average price of our Class A common stock was $73.46. However, upon conversion, there will be no economic dilution from the 2023 Notes, as exercise of the note hedges eliminate any dilution that would have otherwise occurred. The note hedges are required to be excluded from the calculation of diluted earnings per share, as they would be antidilutive under the treasury stock method.

The warrants will have a dilutive effect when the average share price exceeds the warrant strike price of $73.46 per share. As the price of our Class A common stock continues to increase above the warrant strike price, additional dilution would occur at a declining rate so that a $10 increase from the warrant strike price would yield a cumulative dilution of approximately 4.9 million diluted shares for EPS purposes. However, upon conversion, the note hedges would neutralize the dilution from the 2023 Notes so that there would only be dilution from the warrants, which would result in an actual dilution of approximately 1.4 million shares at a common stock price of $83.46.

2026 Notes

In August 2020, we entered into an investment agreement (the "Investment Agreement") with BCPE Nucleon (DE) SVP, LP, an entity affiliated with Bain Capital, LP ("Bain") relating to the issuance and sale to Bain of $750.0 million in aggregate principal amount of the 2026 Notes. The total net proceeds from this offering were approximately $723.7 million, after deducting $26.3 million of debt issuance costs.

The 2026 Notes bear interest at a rate of 2.5% per annum, with such interest to be paid in kind ("PIK") on the 2026 Notes held by Bain through an increase in the principal amount of the 2026 Notes, and paid in cash on any 2026 Notes transferred to entities that are not affiliated with Bain. Interest on the 2026 Notes will accrue from the date of issuance (September 24, 2020) and be added to the principal amount on a semi-annual basis (March 15 and September 15 of each year, beginning on March 15, 2021). The 2026 Notes mature on September 15, 2026, subject to earlier conversion, redemption or repurchase.

Pursuant to the Investment Agreement, and subject to certain exceptions, Bain will be restricted from transferring or entering into an agreement that transfers the economic consequences of ownership of the 2026 Notes or converting the 2026 Notes prior to the earlier of (i) the one-year anniversary of the original issue date of the 2026 Notes or (ii) immediately prior to the consummation of a change of control or entry into a definitive agreement for a transaction that, if consummated, would result in a change of control or fundamental change, as defined in the indenture governing the 2026 Notes. Exceptions to such restrictions on transfer include, among others: (a) transfers to affiliates of Bain, (b) transfers to us or any of our subsidiaries, (c) transfers to a third party where the net proceeds of such sale are solely used to satisfy a margin call or repay a permitted loan, or (d) transfers in connection with certain merger and acquisition events.

The 2026 Notes will be convertible into our shares of Class A common stock based on an initial conversion rate of 36.036 shares of common stock per $1,000 principal amount of the 2026 Notes, which is equal to an initial conversion price of $27.75 per share, subject to customary anti-dilution and other adjustments, including in connection with any make-whole adjustments as a result of certain extraordinary transactions. In addition, at the one-year anniversary of the 2026 Notes, depending on the level of achievement of certain financial milestones, the conversion price is subject to a one-time adjustment, on a sliding scale in the range of $25.25 to $27.75 per share, at which time the conversion price will become fixed.

Upon conversion of the 2026 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 our Class A common stock, at our election.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

On or after September 15, 2025, the 2026 Notes will be redeemable by us in the event that the closing sale price of our Class A common stock has been at least 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the we provide the redemption notice at a redemption price of 100% of the principal amount of such 2026 Notes, plus any accrued and unpaid interest to, but excluding, the redemption date.

With certain exceptions, upon a change of control or a fundamental change, the holders of the 2026 Notes may require us to repurchase all or part of the principal amount of the 2026 Notes at a repurchase price equal to 100% of the principal amount of the 2026 Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date, or holders can convert with an increase in the conversion rate to reflect a make-whole premium.

In accordance with accounting guidance on embedded conversion features, we valued and bifurcated the conversion option associated with the 2026 Notes from the respective host debt instrument, which is treated as a debt discount, and initially recorded the conversion option of $230.9 million as a derivative liability in our condensed consolidated balance sheet, with the corresponding amount recorded as a discount to the 2026 Notes to be amortized over the term of the 2026 Notes using the effective interest method.

The 2026 Notes consisted of the following:

	As of January 31, 2021
	(in thousands)
Principal amounts:
Principal	$	750,000
Unamortized debt discount (conversion feature)⁽¹⁾		(219,829	)
Unamortized debt issuance costs⁽¹⁾		(25,116	)
Net carrying amount	$	505,055

(1)

Included in the condensed consolidated balance sheets within convertible senior notes, net and amortized over the remaining life of the 2026 Notes using the effective interest rate method. The effective interest rate is 7.05%.

As of January 31, 2021, the remaining life of the 2026 Notes was approximately 5.6 years.

The following table sets forth the total interest expense recognized related to the 2026 Notes:

	Three Months Ended		Six Months Ended
	January 31, 2021
	(in thousands)
Interest expense related to amortization of debt discount	$	7,894	$	11,081
Interest expense related to amortization of debt issuance costs		902		1,267
Non-cash interest expense		4,663		6,615
Total interest expense	$	13,459	$	18,963

Non-cash interest expense is related to the 2.5% PIK interest that we accrued from the issuance of the 2026 Notes through January 31, 2021 and was recognized within other expense, net in the condensed consolidated statement of operations and other liabilities–non-current in the condensed consolidated balance sheet. The accrued PIK interest will be converted to the principal balance of the 2026 Notes at each payment date and will be convertible to shares at maturity or when converted.

Impact to Earnings per Share

The 2026 Notes will have no impact on diluted EPS until the average price of our Class A common stock is greater than the conversion price, discussed above, as we intend to settle the principal amount of the 2026 Notes in cash upon conversion. Under the treasury stock method, in periods when we report net income, we are required to include the effect of additional shares that may be issued under the 2026 Notes when the price of our Class A common stock exceeds the conversion price. During the six months ended January 31, 2021, the average price of our Class A common stock did not exceed the conversion price of the 2026 Notes.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 6. LEASES

We have operating leases for offices, research and development facilities and datacenters. Our leases have remaining lease terms of one year to approximately ~~nine~~eight 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.

Our finance leases are not material to our condensed consolidated financial statements. The related assumptions and additional disclosures for our finance leases are not material.

Total operating lease cost was $10.2 million and $18.9 million for the three and six months ended January 31, 2020 and $10.5 million and $20.9 million for the three and six months ended January 31, 2021, respectively, excluding short-term ~~leases and~~lease costs, variable lease costs and sublease income, each of which ~~are~~were not material. Variable lease costs primarily include common area maintenance charges. ~~Total lease expense recognized prior to our adoption of ASC 842 was $8.4 million and $15.7 million for the three and six months ended January 31, 2019, respectively.~~

During the second quarter of fiscal 2020, we ceased using certain office spaces ~~in Bangalore, India.~~internationally. As the carrying value of the related right-of-use assets exceeded fair value, we recorded a $3.0 million impairment in our ~~condensed~~ consolidated statements of operations for the ~~three and six months~~fiscal year ended ~~January~~July 31, 2020. Of the $3.0 million impairment, approximately $1.8 million relates to the impairment of ~~the~~our operating lease right-of-use assets and approximately $1.2 million relates to the impairment of leasehold improvements.

During the first quarter of fiscal 2021, we recorded additional impairment charges related to certain of our international office spaces, as well as an impairment charge related to an office space in the United States. We recorded a $2.8 million impairment in our condensed consolidated statement of operations for the six months ended January 31, 2021. Of the $2.8 million impairment, approximately $1.9 million relates to the impairment of our operating lease right-of-use assets and approximately $0.9 million relates to the impairment of leasehold improvements. Additional charges related to asset impairments may be recorded in the future.

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Supplemental balance sheet information related to leases is as follows:

	As of January 31, 2021
	(in thousands)
Operating leases:
Operating lease right-of-use assets, gross	$	169,887
Accumulated amortization		(48,821	)
Operating lease right-of-use assets, net	$	121,066

Operating lease liabilities—current	$	41,309
Operating lease liabilities—non-current		107,784
Total operating lease liabilities	$	149,093

Weighted average remaining lease term (in years):	3.5
Weighted average discount rate:		5.4	%

As of
January 31, 2020
(in thousands)
Operating leases:
Operating lease right-of-use assets, gross $ 151,975
Impairment (1,756 )
Accumulated amortization (14,539 )
Operating lease right-of-use assets, net $ 135,680

Operating lease liabilities—current $ 31,668
Operating lease liabilities—non-current 129,420
Total operating lease liabilities $ 161,088

Weighted average remaining lease term (in years): 4.3
Weighted average discount rate: 5.4 %

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Supplemental cash flow and other information related to leases is as follows:

	Three Months Ended January 31,				Six Months Ended January 31,
	2020		2021		2020		2021
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,686	$	12,398	$	21,436	$	22,374

Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	23,420	$	3,620	$	36,389	$	13,538

Six Months Ended January 31, 2020
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 21,436

Lease liabilities arising from obtaining right-of-use assets:
Operating leases $ 36,389

The undiscounted cash flows for our operating lease liabilities as of January 31, ~~2020~~2021 were as follows:

Fiscal Year Ending July 31:	Amount
	(in thousands)
2021 (remaining six months)	$	24,174
2022		48,894
2023		47,688
2024		33,040
2025		7,194
Thereafter		4,698
Total lease payments		165,689
Less: imputed interest		(16,596	)
Total lease obligation		149,093
Less: current lease obligations		(41,309	)
Long-term lease obligations	$	107,784

Fiscal Year Ending July 31: Amount
(in thousands)
2020 (remaining six months) $ 17,998
2021 43,636
2022 42,655
2023 40,854
2024 29,849
Thereafter 8,473
Total lease payments 183,465
Less: imputed interest (22,377 )
Total lease obligation 161,088
Less: current lease obligations 31,668
Long-term lease obligations $ 129,420

As of January 31, ~~2020,~~2021, we ~~have~~had additional operating lease commitments of approximately ~~$4.9~~$0.8 million on an undiscounted basis for certain office leases that have not yet commenced. These operating leases will commence during ~~the remainder of fiscal 2020, fiscal 2021 and~~ fiscal 2022, with lease terms of approximately two ~~to five~~ years.

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2019, the following table summarizes the future minimum payments due under our operating leases as of July 31, 2019, reported under ASC 840:

Fiscal Year Ending July 31: Amount
(in thousands)
2020 $ 39,540
2021 41,909
2022 41,332
2023 40,695
2024 30,240
Thereafter 3,511
Total $ 197,227

NOTE 7. COMMITMENTS AND CONTINGENCIES

Purchase Commitments

In the normal course of business, we make commitments with our ~~contract manufacturers and~~ OEMs to ensure them a minimum level of financial consideration for their investment in our joint solutions. These commitments are based on revenue 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 January 31, ~~2020,~~2021, we had up to approximately ~~$95.7~~$61.4 million of non-cancelable purchase obligations and other commitments pertaining to our daily business operations, and up to approximately ~~$134.9~~$66.9 million in the form of guarantees to certain of our ~~contract manufacturers and~~ OEMs.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Legal Proceedings

Securities Class Actions. Beginning on March 29, 2019, several purported securities class actions were filed in the United States District Court for the Northern District of California against us and two of our officers. The initial complaints generally alleged that the defendants made false and misleading statements in violation of Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5. In July 2019, the court consolidated the actions into a single action, and appointed a lead plaintiff, who ~~per the court-approved schedule,~~then filed a consolidated amended complaint ~~on September 9, 2019.~~(the "Original Complaint"). The action iswas brought on behalf of those who purchased or otherwise acquired our stock between November 30, 2017 and May 30, 2019, inclusive. The ~~consolidated~~defendants subsequently filed a motion to dismiss the Original Complaint, which the court granted on March 9, 2020, while providing the lead plaintiff leave to amend. On April 17, 2020, the lead plaintiff filed a second amended complaint (the "Current Complaint"), again naming us and two of our officers as defendants. The Current Complaint alleges the same class period, includes many of the same factual allegations as the Original Complaint, and again alleges that the defendants violated Sections 10(b) and 20(a) of the Exchange Act, as well as SEC Rule 10b-5. The Current Complaint seeks monetary damages in an unspecified amount. On September 11, 2020, the court denied our motion to dismiss the Current Complaint and held that the lead plaintiff adequately stated a claim with respect to certain statements regarding our new customer growth and sales productivity. The ~~defendants~~court held a case management conference on October 27, 2020 and set a pretrial schedule for the case. On January 27, 2021, lead plaintiff, Shimon Hedvat, filed a motion to ~~dismiss the amended complaint~~(i) withdraw as lead plaintiff and (ii) substitute proposed new lead plaintiffs Jose Flores and the ~~court held~~City of Miami Fire Fighters and Police Officers Retirement Trust and approve their appointment of a ~~hearing on the motion~~new co-lead counsel. Defendants filed an opposition on February ~~12, 2020. We are awaiting~~10, 2021, lead plaintiff filed a ~~decision from~~reply on February 17, 2021, and defendants filed a response to lead plaintiff’s reply on February 22, 2021. On March 1, 2021, the court ~~regarding~~granted the ~~motion. This case~~lead plaintiff’s motion to withdraw as lead plaintiff but denied without prejudice his motion to substitute proposed new lead plaintiffs. The court also reopened the lead plaintiff selection process, allowing any putative class member interested in serving as the new lead plaintiff to file a lead plaintiff application within 21 days of the order. The litigation is still in ~~the very~~ early stages, and we plan to continue to vigorously defend against the allegations and we are not able to determine what, if any, liabilities will attach to ~~these complaints.~~

the Current Complaint.

Shareholder Derivative Actions.Beginning on July 1, 2019, several shareholder derivative complaints were filed in each of the U.S. District Court for the Northern District of California, the Superior Court of California for the County of San Mateo and the Superior Court of California for the County of Santa Clara, naming (i) fourteen of Nutanix’s current and former officers and directors as defendants and (ii) the Company as a nominal defendant. The complaints generally ~~allege~~alleged claims for breach of fiduciary duty, waste of corporate assets and unjust enrichment, all based on the same general underlying allegations that are contained in the securities class actions described above. The Superior Court complaints additionally ~~allege~~alleged insider trading and violation of California Corporations Code Section 25402, and the Santa Clara County Superior Court complaints further ~~include~~included additional claims for "abuse of control" and "gross mismanagement." In January 2020, the court consolidated the federal derivative actions into a single action, and set a schedule for plaintiffs to file a consolidated complaint, which is currently due on March 6, 2020. In August 2019, the ~~court~~Superior Court of California for the County of Santa Clara consolidated the Santa Clara derivative actions into a single action and, in January 2020, the court stayed the consolidated Santa Clara action in deference to the federal derivative actions described above. On September 17, 2019, the Superior Court of California for the County of San Mateo ~~court~~ granted the plaintiff’s request for voluntary dismissal without prejudice. ~~The~~On January 7, 2020, the U.S. District Court for the North District of California consolidated the federal actions and, on March 6, 2020, the plaintiffs filed a stipulation designating a lead plaintiff and deeming the lead plaintiff’s original complaint as the designated complaint in the matter. On April 22, 2020, (i) the individual defendants ~~have not responded~~filed a motion to ~~any~~dismiss the designated complaint on the grounds that it fails to state a claim, and (ii) we filed a motion to dismiss the designated complaint on the grounds that the plaintiffs failed to make a demand on our Board of Directors before filing the designated complaint. In response, the plaintiffs filed an amended complaint on June 17, 2020. On October 5, 2020, the court granted the individual defendants’ motions to dismiss the amended complaint, while providing the plaintiffs leave to amend their complaint by October 26, 2020, which deadline was extended to December 1, 2020. In lieu of filing an amended complaint, the stockholders in the federal derivative actions have made a demand on our Board of Directors to ~~date. These cases~~investigate the allegations underlying the securities class action matters, and the parties subsequently filed a stipulation with the court to have the federal derivative lawsuit dismissed. On December 22, 2020, pursuant to the parties’ stipulation, the matter was dismissed in toto and with prejudice with respect to plaintiffs’ standing to pursue derivative claims based on allegations of demand futility. The matters are in the very early stages and we are not able to determine what, if any, liabilities will attach to these ~~complaints.~~

matters.

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 party to various litigation matters and subject to claims that arise in the ordinary course of business.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 8. STOCKHOLDERS’ EQUITY

We have 2 classes of authorized common stock, Class A common stock and Class B common stock. As of January 31, ~~2020,~~2021, we had ~~1000000000~~1 billion shares of Class A common stock authorized, with a par value of $0.000025 per share, and 200 million shares of Class B common stock authorized, with a par value of $0.000025 per share. As of January 31, ~~2020,~~2021, we had ~~179.6~~193.5 million shares of Class A common stock issued and outstanding and ~~15.1~~10.8 million shares of Class B common stock issued and outstanding.

Holders of Class A common stock are entitled to 1 vote for each share of Class A common stock held on all matters submitted to a vote of stockholders. Holders of Class B common stock are entitled to 10 votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Except with respect to voting, the rights of the holders of Class A and Class B common stock are identical. Shares of Class B common stock are voluntarily convertible into shares of Class A common stock at the option of the holder and are generally automatically converted into shares of our Class A common stock upon a sale or transfer. Shares issued in connection with exercises of stock options, vesting of restricted stock units, or shares purchased under the employee stock purchase plan are generally automatically converted into shares of our Class A common stock. Shares issued in connection with an exercise of common stock warrants are converted into shares of our Class B common stock.

Share Repurchase

In August 2020, our Board of Directors authorized the repurchase of up to $125.0 million of our Class A common stock. Repurchases were made through open market purchases or privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. The repurchase program did not obligate us to acquire any particular amount of our common stock, and could have been suspended at any time at our discretion.

During the six months ended January 31, 2021, we repurchased 5.2 million shares of common stock in open market transactions at an average price of $24.15 per share, for an aggregate purchase price of $125.0 million. As of January 31, 2021, there is 0 remaining authorization and the program has expired, as our Board of Directors does not plan to authorize any additional share repurchases in the foreseeable future.

NOTE 9. EQUITY INCENTIVE PLANS

Stock Plans

We have 3 equity incentive plans, the 2010 Stock Plan ("2010 Plan"), 2011 Stock Plan ("2011 Plan") and 2016 Equity Incentive Plan ("2016 Plan"). Our stockholders 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 will 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 restricted stock units ("RSUs"), or until those stock awards become vested or expired by their terms.

Under the 2016 Plan, we may grant incentive stock options, non-statutory stock options, restricted stock, RSUs and stock appreciation rights to employees, directors and consultants. We initially reserved 22.4 million shares of our Class A common stock for issuance under the 2016 Plan. The number of shares of Class A common stock available for issuance under the 2016 Plan will also include an annual increase on the first day of each fiscal year, beginning in fiscal 2018, equal to the lesser of: 18.0 million shares, 5% of the outstanding shares of all classes of common stock as of the last day of our immediately preceding fiscal year, or such other amount as may be determined by the Board. Accordingly, on August 1, 2019 and 2020, the number of shares of Class A common stock available for issuance under the 2016 Plan increased by 9.4 million and 10.1 million shares, respectively, pursuant to these provisions. As of January 31, ~~2020,~~2021, we had reserved a total of ~~47.8~~47.0 million shares for the issuance of equity awards under the Stock Plans, of which ~~14.3~~13.4 million shares were still available for grant.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Restricted Stock Units

Performance RSUs — We have granted RSUs that have both service and performance conditions to our executives and employees ("Performance RSUs"). Vesting of Performance RSUs 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 Performance RSUs are subject to the performance conditions actually being met.

Market Stock Units — Due to the departure of our former Chief Executive Officer (“CEO”) in December 2020, the 300,000 RSUs subject to certain market conditions ("MSUs") that were previously granted in October 2018 and December 2019 were forfeited.

In ~~October 2018,~~connection with his hiring, in December 2020, the Compensation Committee of our Board of Directors approved the grant of ~~100,000 RSUs subject to certain market conditions ("MSUs")~~703,117 MSUs to our ~~Chief Executive Officer, with~~new CEO. These MSUs have a weighted average grant date fair value per unit of ~~$25.16. The MSUs~~$35.69 and will vest up to 133% based upon the achievement of ~~an average~~certain stock price ~~of $80~~targets over a performance period of approximately ~~4.5~~4.0 years, ~~(the "Performance Period"),~~ subject to his continuous service on each vesting date. ~~The average stock price is calculated based on~~

In order to align with the ~~average closing price of one share of~~MSUs granted to our Class A common stock, as reported on the Nasdaq Stock Market during the 180-day period ending on the last trading day prior to each measurement date (as applicable, the "Average Stock Price"). The Average Stock Price is measured once per quarter during the Performance Period, and:

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~


•	~~If the Average Stock Price on any given quarterly measurement date does not equal or exceed~~ ~~$80, then none of the MSUs will vest that quarter, and any unvested MSUs will carry over to the next quarter (the "Carryover MSUs");~~


•	~~If the Average Stock Price on any given quarterly measurement date equals or exceeds~~ ~~$80, then 1/18th of the MSUs plus the applicable Carryover MSUs, if any, would vest; and/or~~


•	~~If the Average Stock Price never equals or exceeds~~ ~~$80~~ ~~during the Performance Period, the MSUs would terminate at the end of the Performance Period.~~

Innew CEO, in December ~~2019,~~2020, the Compensation Committee of our Board of Directors ~~approved~~modified the ~~grant~~vesting conditions for the 75,000 MSUs previously granted to another of ~~200,000 additional~~our executives. These modified MSUs ~~to our Chief Executive Officer, with~~have a weighted average grant date fair value per unit of ~~$20.80. The MSUs~~$27.54 and will vest based upon the achievement of ~~an average~~a modified stock price ~~of $65~~target over athe original performance period of approximately ~~4.5~~3.9 years, ~~(the "Second Performance Period"),~~ subject to ~~his~~ continuous service on each vesting date. The average stock price is calculated based on the average closing price of one share of our Class A common stock, as reported on the Nasdaq Stock Market during the 180-day period ending on the last trading day prior to each measurement date ~~(as applicable, the "Second Average Stock Price")~~. The ~~Second Average Stock Price is measured once per quarter during the Second Performance Period, and:~~


•	~~If the Second Average Stock Price on any given quarterly measurement date does not equal or exceed~~ ~~$65, then none of the MSUs will vest that quarter, and any unvested MSUs will carry over to the next quarter (the "Carryover MSUs");~~


•	~~If the Second Average Stock Price on any given quarterly measurement date equals or exceeds~~ ~~$65, then 1/18th of the MSUs plus the applicable Carryover MSUs, if any, would vest; and/or~~


•	~~If the Second Average Stock Price never equals or exceeds~~ ~~$65~~ ~~during the Second Performance Period, the MSUs would terminate at the end of the Second Performance Period.~~

incremental compensation cost resulting from this modification was not material.

We used Monte Carlo simulations to calculate the fair value of these awards on the grant date. A Monte Carlo simulation 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 recognize stock-based compensation expense related to these MSUs using the graded vesting attribution method over the ~~Performance Period or Second Performance Period, as applicable.~~ respective performance periods. As of January 31, ~~2020~~2021, ~~300,000~~778,117 MSUs remained outstanding.

Below is a summary of RSU activity, including MSUs, under the Stock Plans:

	Number of Shares			Grant Date Fair Value per Share
	(in thousands)
Outstanding at July 31, 2020		22,632		$	32.70
Granted		12,211		$	29.37
Released		(5,251	)	$	32.21
Forfeited		(2,310	)	$	31.51
Outstanding at January 31, 2021		27,282		$	31.40

Number of
Shares Grant Date Fair Value per Share
(in thousands)
Outstanding at July 31, 2019 22,136
$ 36.72
Granted 10,511
$ 29.47
Released (4,236 ) $ 33.72
Forfeited (2,787 ) $ 34.34
Outstanding at January 31, 2020 25,624
$ 34.61

Stock Options

We did ~~not~~0t grant any stock options during the six months ended January 31, ~~2020.~~2021. A total of ~~0.9~~0.8 million stock options were exercised during the six months ended January 31, ~~2020,~~2021, with an average exercise price per share of ~~$5.74.~~$5.09. As of January 31, ~~2020, 7.9~~2021, 6.3 million stock options, with a weighted average exercise price of ~~$5.14~~$4.55 per share, a weighted average remaining contractual life of ~~4.2~~2.2 years and an aggregate intrinsic value of ~~$215.3~~$163.3 million, remained outstanding.

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

Employee Stock Purchase Plan

In December 2015, the Board 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 ("Original 2016 ESPP"). The Original 2016 ESPP became effective in connection with our IPO. On December 13, 2019, during our 2019 Annual Meeting of Stockholders, our stockholders approved certain amendments to the Original 2016 ESPP. Under the amended and restated Original 2016 ESPP ("2016 ESPP"), the maximum number of shares of Class A common stock available for sale is 11.5 million shares, representing an increase of 9.2 million shares.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 2 six-month purchase periods.

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 six months ended January 31, ~~2020, 1.0~~2021, 1.5 million shares of common stock were purchased under the 2016 ESPP for an aggregate amount of ~~$21.3~~$18.1 million. As of January 31, ~~2020, 11.5~~2021, 7.7 million shares ~~which includes the 9.2 million additional shares approved by our stockholders,~~ 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:

	Six Months Ended January 31,
	2020			2021
Expected term (in years)		0.92			0.92
Risk-free interest rate		1.9	%		0.1	%
Volatility		68.7	%		73.4	%
Dividend yield		0	%		0	%

Six Months Ended
January 31,
2019 2020
Expected term (in years) 0.79
0.92
Risk-free interest rate 2.5 % 1.9 %
Volatility 49.5 % 68.7 %
Dividend yield — % — %

Stock-Based Compensation

Total stock-based compensation expense recognized in the condensed consolidated statements of operations is as follows:

	Three Months Ended January 31,				Six Months Ended January 31,
	2020		2021		2020		2021
	(in thousands)
Cost of revenue:
Product	$	1,458	$	1,659	$	2,570	$	3,163
Support, entitlements and other services		5,140		5,764		9,891		11,525
Sales and marketing		31,185		30,031		58,960		62,258
Research and development		36,459		36,058		74,022		73,945
General and administrative		11,373		10,942		21,598		22,761
Total stock-based compensation expense	$	85,615	$	84,454	$	167,041	$	173,652

Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands)
Cost of revenue:
Product $ 872
$ 1,458
$ 1,570
$ 2,570
Support, entitlements and other services 3,373
5,140
6,530
9,891
Sales and marketing 23,462
31,185
46,068
58,960
Research and development 34,679
36,459
65,688
74,022
General and administrative 10,179
11,373
18,634
21,598
Total stock-based compensation expense $ 72,565

$ 85,615
$ 138,490
$ 167,041

As of January 31, ~~2020,~~2021, unrecognized stock-based compensation expense related to outstanding stock awards was approximately ~~$843.4~~$776.1 million and is expected to be recognized over a weighted average period of approximately ~~2.7~~2.8 years.

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

NOTE 10. INCOME TAXES

The income tax provision of $2.2 million for the three months ended January 31, 2019 primarily consisted of foreign taxes on our international operations and U.S. state income taxes, partially offset by a tax benefit related to the change in tax law. The income tax benefit of $1.4 million for the six months ended January 31, 2019 primarily consisted of a $5.9 million valuation allowance release in connection with an acquisition and a tax benefit related to the change in tax law, partially offset by foreign taxes on our international operations and U.S. state income taxes. The net deferred tax liability recorded in connection with this acquisition provided an additional source of taxable income to support the realizability of the pre-existing deferred tax assets and as a result, we released a portion of our U.S. valuation allowance.

The income tax provisions of $4.6 million and $8.6 million for the three and six months ended January 31, 2020 and $5.1 million and $9.4 million for the three and six months ended January 31, 2021, respectively, primarily consisted of foreign taxes on our international operations and U.S. state income taxes. We continue to maintain a valuation allowance for our U.S. Federal and state deferred tax assets and a partial valuation allowance related to our foreign net deferred tax assets.

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 11. NET 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 giving effect to potentially dilutive common stock equivalents outstanding during the period, as their effect would be dilutive. Potentially dilutive common shares include participating securities and shares issuable upon the exercise of stock options, the exercise of common stock warrants, the exercise of convertible preferred stock warrants, the vesting of RSUs and each purchase under the 2016 ESPP, under the treasury stock 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 rights, including the liquidation and dividend rights, of the holders of our Class A and Class B common stock are identical, except with respect to voting. As the liquidation and dividend rights are identical, our undistributed earnings or losses are allocated on a proportionate basis among the holders of both Class A and Class B common stock. As a result, the net income (loss) per share attributed to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.

The computation of basic and diluted net loss per share attributable to Class A and Class B common stockholders is as follows:

	Three Months Ended January 31,						Six Months Ended January 31,
	2020			2021			2020			2021
	(in thousands, except per share data)
Numerator:
Net loss	$	(217,564	)	$	(287,390	)	$	(446,864	)	$	(552,438	)
Denominator:
Weighted average shares—basic and diluted		192,727			202,520			191,199			202,798
Net loss per share attributable to common stockholders— basic and diluted	$	(1.13	)	$	(1.42	)	$	(2.34	)	$	(2.72	)

Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands, except per share data)
Numerator:
Net loss $ (122,763 ) $ (217,564 ) $ (217,028 ) $ (446,864 )
Denominator:
Weighted average shares—basic and diluted 179,445
192,727
177,428
191,199
Net loss per share attributable to common stockholders—basic and diluted $ (0.68 ) $ (1.13 ) $ (1.22 ) $ (2.34 )

~~NUTANIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows:

	Six Months Ended January 31,
	2020		2021
	(in thousands)
Outstanding stock options and RSUs		33,500		33,571
Employee stock purchase plan		2,793		2,719
Contingently issuable shares pursuant to business combinations		611		253
Common stock warrants		34		0
Total		36,938		36,543

Three and Six Months Ended
January 31,
2019 2020

(in thousands)
Outstanding stock options and RSUs 31,898
33,500
Employee stock purchase plan 1,527
2,793
Contingently issuable shares pursuant to business combinations 920
611
Common stock subject to repurchase 15
—
Common stock warrants 34
34
Total 34,394

36,938

Table of Contents

NUTANIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 12. SEGMENT INFORMATION

Our chief operating decision maker is a group which is comprised of our Chief Executive Officer and Chief Financial Officer. This group reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, we have a single reportable segment.

The following table sets forth revenue by geographic location based on bill-to location:

	Three Months Ended January 31,				Six Months Ended January 31,
	2020		2021		2020		2021
	(in thousands)
U.S.	$	182,372	$	182,261	$	367,139	$	359,374
Asia Pacific		70,804		63,187		131,125		125,785
Europe, the Middle East and Africa		75,681		86,135		132,394		146,041
Other Americas		17,910		14,799		30,877		27,936
Total revenue	$	346,767	$	346,382	$	661,535	$	659,136

Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands)
U.S. $ 180,654
$ 182,372
$ 361,660
$ 367,139
Asia Pacific 71,772
70,804
139,010
131,125
Europe, the Middle East and Africa 69,630
75,681
124,406
132,394
Other Americas 13,304
17,910
23,567
30,877
Total revenue $ 335,360

$ 346,767
$ 648,643
$ 661,535

As of July 31, ~~2019~~2020 and January 31, ~~2020, $161.9~~2021, $136.7 million and ~~$149.6~~$118.8 million, respectively, of our long-lived assets, net were located in the United States.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition, results of operations and cash flows should be read in conjunction with (1) the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (2) the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended July 31, ~~2019~~2020 included in our Annual Report on Form 10-K filed on September ~~24, 2019.~~23, 2020. The last day of our fiscal year is July 31. Our fiscal quarters end on October 31, January 31, April 30 and July 31. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the heading "Risk Factors" in Part ~~II,~~I, Item 1A of ~~this~~our Annual Report on Form ~~10-Q.~~10-K for our fiscal year ended July 31, 2020. See also "Special Note Regarding Forward-Looking Statements" above.

Overview

Nutanix, Inc. ("we," "us," "our" or "Nutanix") provides a leading enterprise cloud platform, which we call the Nutanix Hybrid Cloud Platform, that consists of software solutions and cloud services that power ~~many of the world’s business~~our customers’ hybrid cloud and multicloud strategies. Our solutions run across private-, hybrid- and multicloud environments, and allow organizations to seamlessly "lift and shift" their workloads, including enterprise applications, ~~by digitizing the traditional silos of enterprise computing. We seek to provide an enterprise~~high-performance databases, end-user computing and virtual desktop infrastructure ("VDI") services, cloud ~~platform that empowers our customers to unify various clouds - private, public, distributed - into one seamless~~native workloads, and analytics applications, between different cloud allowing enterprises to choose the right cloud for each application. Our enterprise cloud platform natively converges compute, virtualization, storage, networking, desktop and security services into one integrated, simple to consume solution, which allows enterprises to simplify the complexities of a multi-cloud environment with automation, cost governance and compliance.

environments.

Our enterprise cloud platform can be deployed on a variety of qualified hardware platforms or, in the case of our cloud-based software and software as a service ("SaaS") offerings, via hosted service or delivered pre-installed on an appliance that is configured to order. Non-portable software islicenses are delivered or sold alongside configured-to-order appliances ~~with a license term equal to~~and can be used over the life of the associated appliance. Our subscription term-based licenses are sold separately, or can be sold alongside configured-to-order appliances. Configured-to-order appliances, including our Nutanix-branded NX hardware line, can be purchased from one of our channel partners, original equipment manufacturers ("OEMs") or in limited cases, directly from Nutanix. Our enterprise cloud platform is typically purchased with one or more years of support and entitlements, which includes the right to software upgrades and enhancements as well as technical support.

Product revenue is generated primarily from the licensing of our solutions. Support, entitlements and other services revenue is primarily derived from the related support and maintenance contracts. Prior to fiscal 2019, we delivered most of our solutions on an appliance, thus our revenue included the revenue associated with the appliance and the included non-portable software, which lasts for the life of the associated appliance. However, starting in fiscal 2018, as a result of our business model transition toward software-only sales, more of our customers began buying appliances directly from our OEMs while separately buying licenses for our software solutions from us or one of our channel partners. In addition, starting in fiscal 2019, as a result of our transition towards a subscription-based business model, more of our customers began purchasing separately sold subscription term-based licenses that could be deployed on a variety of hardware platforms. As we continue our transition to a subscription-based business model, we expect a greater portion of our products to be delivered through subscription term-based licenses or cloud-based SaaS subscriptions.

We had a broad and diverse base of approximately ~~15,880~~18,770 end customers as of January 31, ~~2020,~~2021, including approximately ~~880~~950 Global 2000 enterprises. We define the number of end customers as the number of end customers for which we have received an order by the last day of the period, excluding partners to which we have sold products for their own demonstration purposes. A single organization or customer may represent multiple end customers for separate divisions, segments or subsidiaries. Since shipping our first product in fiscal 2012, our end customer base has grown rapidly. The number of end customers grew from approximately ~~12,410 as of January 31, 2019 to approximately~~ 15,880 as of January 31, ~~2020.~~

2020 to approximately 18,770 as of January 31, 2021.

Our solutions are primarily sold through channel partners, including distributors, resellers and OEMs, and delivered directly to our end customers. Our solutions serve a broad range of workloads, including enterprise applications, databases, virtual desktop infrastructure, unified communications and big data analytics, and we support both virtualized and container-based applications. We have end customers across a broad range of industries, such as automotive, consumer goods, education, energy, financial services, healthcare, manufacturing, media, public sector, retail, technology and telecommunications. We also sell to service providers, who utilize our enterprise cloud platform to provide a variety of cloud-based services to their customers.

Table of Contents

NUTANIX, INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

We continue to invest ~~heavily~~ in the growth of our business, including the development of our solutions, ~~build-out of~~hiring for critical roles in our global ~~sales force,~~teams, projects to increase the demand for our solutions and other sales and marketing initiatives. The number of our full-time employees increased from approximately ~~4,700 as of January 31, 2019 to approximately~~ 6,100 as of January 31, ~~2020.~~2020 to approximately 6,210 as of January 31, 2021. We have an engineering team focused on distributed systems and IT infrastructure technologies at our San Jose, California headquarters and at our research and development centers in India, North Carolina, Washington, Serbia and Germany. We have in the past also expanded our international sales and marketing presence by continuing to build out our global teams and continuing to invest in sales and marketing initiatives, such as additional demand generation spending to increase pipeline growth. We ~~intend~~plan to, in the long term, ~~continue investing~~invest in our global engineering team to enhance the functionality of our enterprise cloud platform, including our newer subscription-based products, introduce new products and features ~~and~~to build upon our technology leadership, as well as ~~continue to~~ expand our global sales and marketing teams. However, as ~~disclosed in February 2020 and~~ discussed further in the "Impact of the COVID-19 Pandemic" and "Factors Affecting Our Performance" ~~section~~sections below, ~~for~~both in response to the ~~second half~~ongoing and rapidly evolving COVID-19 pandemic and as part of ~~fiscal 2020~~our overall efforts to improve our operating cash flow performance, we have proactively taken ~~a pause on a significant portion of~~steps to manage our ~~planned headcount outside of our sales teams and a few other select roles and, as~~expenses. As a result, our overall spending on such efforts will fluctuate, and may ~~fluctuate~~decline, from quarter to quarter in the near-term.

~~Our total revenue was $648.6 million~~

Impact of the COVID-19 Pandemic

The ongoing and ~~$661.5 million~~rapidly evolving COVID-19 pandemic has significantly curtailed the movement of people, goods and services worldwide, imposed unprecedented strains on governments, health care systems, educational institutions, businesses and individuals around the world, including in nearly all of the regions in which we operate, and has resulted in significant volatility and uncertainty in the global economy. In response to the pandemic, authorities, businesses, and individuals have implemented numerous unprecedented measures, including travel bans and restrictions, quarantines, shelter-in-place, stay-at-home, remote work and social distancing orders, and shutdowns, which have impacted and will continue to impact our workforce and operations, as well as those of our customers, vendors, suppliers, and partners.

In response to the COVID-19 pandemic, we have also been required – or have deemed it necessary – to take a number of actions to protect and assist our employees, customers, and partners, including: temporarily closing all of our offices (including our California headquarters) around the world; requiring our employees to work remotely; implementing travel restrictions that allow only the most essential business travel; and postponing, cancelling, withdrawing from, or converting to virtual-only experiences (where possible and appropriate) our in-person customer, industry, analyst, investor, and employee events, such as our 2020 .NEXT customer and partner events, our 2020 Investor Day, and our fiscal 2021 sales kick off; and offering extended payment terms of up to 60 days to certain partners through July 2020. As a result of such actions, as well as the general effects of the COVID-19 pandemic, our business and operations have experienced and may continue to experience numerous negative impacts, including: curtailed demand for certain of our solutions; reduced IT spending; delays in or abandonment of planned or future purchases; lengthened payment terms; lengthened sales cycles, particularly with new customers and partners who do not have prior experience with our solutions; supply chain disruptions; and voluntary and involuntary delays in the ~~six months ended January 31, 2019~~ability to ship, and ~~2020, respectively, an~~the ability of our end customers to accept delivery of, the hardware platforms on which our software solutions run. We also expect the reduced manufacturing capacity caused by the pandemic to result in increases in the prices of certain components used to manufacture such hardware platforms, which may increase the price of ~~2.0%. Our software~~those hardware platforms for our end customers. Travel bans, shutdowns, social distancing restrictions and remote work policies also make it difficult or impossible to deliver on-site services to our partners and end customers, and to meet with our current and potential end customers in person. We have also seen positive impacts, including increased demand for our virtual desktop, desktop-as-a-service, and end-user computing solutions as a result of our end customers enabling their employees to work remotely.

We have also quickly adapted to the new work environment, leveraging digital, video, and other collaborative tools to enable our teams to stay connected with each other, and our sales, marketing and support ~~revenue,~~teams to continue to engage with and remain responsive to our partners and end customers. We have also seen a reduction in our operating expenses in recent quarters, including sales and marketing expenses, some of which is due to a number of proactive actions that we ~~also refer~~took to manage our operating expenses in light of the uncertainty caused by the COVID-19 pandemic, and some of which is a natural result of the continued restrictions on travel and in-person events from the pandemic. Although the full impact of these actions is uncertain, some of these cost savings measures are temporary While we do expect to see some of our operating expenses increase from the suppressed levels in recent quarters as ~~total contract value ("TCV") revenue, was $578.2 million~~some of the proactive cost savings measures expire and ~~$643.3 million for the six months ended January 31, 2019~~some level of travel and ~~2020, respectively, an increase of 11.3%. Our subscription revenue was $284.3 million and $484.4 million for the six months ended January 31, 2019 and 2020, respectively, an increase of 70.4%.~~

~~Our net loss was $217.0 million and $446.9 million for the six months ended January 31, 2019 and 2020, respectively. Net cash provided by~~other related expenses return, we are focused on improving our operating ~~activities was $88.3 million and net cash used in operating activities was $78.7 million for the six months ended January 31, 2019 and 2020, respectively. Free~~ cash flow ~~which is calculated as net cash provided by (used in) operating activities less purchases~~performance and we do not expect that travel or other related expenses will return to pre-pandemic levels. See the section titled "Risk Factors" in Part I, Item 1A of ~~property and equipment, was an inflow of $15.9 million and use of $118.1 million~~our Annual Report on Form 10-K for ~~the six months~~our fiscal year ended ~~January 31, 2019 and 2020, respectively. As of January~~July 31, 2020 for further discussion of the possible impact of these actions on our business and financial performance.

Table of Contents

NUTANIX, INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

The duration, scope and ultimate impact of the COVID-19 pandemic on the global economy and our business remain highly fluid and cannot be predicted with certainty, and the full effect of the pandemic and the actions we ~~had an accumulated deficit~~have taken in response may not be fully reflected in our results of ~~$2.1 billion.~~

operations and financial performance until future periods. Our management team is focused on guiding our company through the emerging challenges presented by COVID-19 and remains committed to driving positive business outcomes. Although we do not currently expect the pandemic to affect our financial reporting systems, internal control over financial reporting or disclosure controls and procedures, the continued impact of the pandemic on our business and financial performance will be highly dependent upon numerous factors, many of which are beyond our control. See the section titled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for our fiscal year ended July 31, 2020 for further discussion of the possible impact of the COVID-19 pandemic, as well as the actions we have taken in response, on our business and financial performance.

Key Financial and Performance Metrics

We monitor the following key financial and performance metrics:

	As of and for the
	Three Months Ended January 31,						Six Months Ended January 31,
	2020			2021			2020			2021
	(in thousands, except percentages)
Total revenue	$	346,767		$	346,382		$	661,535		$	659,136
Year-over-year percentage increase (decrease)		3.4	%		(0.1	)%		2.0	%		(0.4	)%
Subscription revenue	$	266,544		$	305,946		$	484,440		$	584,111
Total billings	$	428,077		$	385,513		$	808,075		$	720,461
Subscription billings	$	339,142		$	339,168		$	614,680		$	633,091
ACV billings	$	139,529		$	159,208		$	256,965		$	285,956
Run-rate ACV	$	1,080,931		$	1,384,823		$	1,080,931		$	1,384,823
Gross profit	$	271,544		$	275,428		$	514,111		$	520,223
Adjusted gross profit	$	282,373		$	286,545		$	534,497		$	542,586
Gross margin		78.3	%		79.5	%		77.7	%		78.9	%
Adjusted gross margin		81.4	%		82.7	%		80.8	%		82.3	%
Total deferred revenue	$	1,056,584		$	1,246,291		$	1,056,584		$	1,246,291
Net cash used in operating activities	$	(52,491	)	$	(15,557	)	$	(78,654	)	$	(19,630	)
Free cash flow	$	(73,739	)	$	(28,473	)	$	(118,105	)	$	(44,798	)
Non-GAAP operating expenses	$	396,316		$	353,527		$	782,653		$	694,770
Total end customers		15,880			18,770			15,880			18,770

As of and for the
Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands, except percentages)
Total revenue $ 335,360
$ 346,767
$ 648,643
$ 661,535
Year-over-year percentage increase 17.0 % 3.4 % 15.4 % 2.0 %
Subscription revenue $ 157,356
$ 266,544
$ 284,332
$ 484,440
Software and support revenue (TCV revenue) $ 297,441
$ 338,225
$ 578,177
$ 643,269
Total billings $ 413,419
$ 428,077
$ 796,975
$ 808,075
Subscription billings $ 233,616
$ 339,142
$ 428,380
$ 614,680
Software and support billings (TCV billings) $ 375,500
$ 419,535
$ 726,509
$ 789,809
Gross profit $ 249,378
$ 271,544
$ 488,555
$ 514,111
Adjusted gross profit $ 257,478
$ 282,373
$ 503,678
$ 534,497
Gross margin 74.4 % 78.3 % 75.3 % 77.7 %
Adjusted gross margin 76.8 % 81.4 % 77.7 % 80.8 %
Total deferred revenue $ 779,859
$ 1,056,584
$ 779,859
$ 1,056,584
Net cash provided by (used in) operating activities $ 38,490
$ (52,491 ) $ 88,314
$ (78,654 )
Free cash flow $ (4,061 ) $ (73,739 ) $ 15,931
$ (118,105 )
Non-GAAP operating expenses $ 296,502
$ 396,316
$ 568,567
$ 782,653
Total end customers 12,410
15,880
12,410
15,880

Table of Contents

NUTANIX, INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Disaggregation of Revenue and Billings

The following table depicts the disaggregation of revenue and billings by type, consistent with how we evaluate our financial performance:

	Three Months Ended January 31,				Six Months Ended January 31,
	2020		2021		2020		2021
	(in thousands)
Disaggregation of revenue:
Subscription revenue	$	266,544	$	305,946	$	484,440	$	584,111
Non-portable software revenue		59,131		21,661		136,702		41,704
Hardware revenue		8,542		1,321		18,266		2,050
Professional services revenue		12,550		17,454		22,127		31,271
Total revenue	$	346,767	$	346,382	$	661,535	$	659,136

Disaggregation of billings:
Subscription billings	$	339,142	$	339,168	$	614,680	$	633,091
Non-portable software billings		59,131		21,661		136,702		41,704
Hardware billings		8,542		1,321		18,266		2,050
Professional services billings		21,262		23,363		38,427		43,616
Total billings	$	428,077	$	385,513	$	808,075	$	720,461

Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands)
Disaggregation of revenue:
Subscription revenue $ 157,356
$ 266,544
$ 284,332
$ 484,440
Non-portable software revenue 131,621
59,131
278,191
136,702
Hardware revenue 37,919
8,542
70,466
18,266
Professional services revenue 8,464
12,550
15,654
22,127
Total revenue $ 335,360
$ 346,767
$ 648,643
$ 661,535

Disaggregation of billings:
Subscription billings $ 233,616
$ 339,142
$ 428,380
$ 614,680
Non-portable software billings 131,621
59,131
278,191
136,702
Hardware billings 37,919
8,542
70,466
18,266
Professional services billings 10,263
21,262
19,938
38,427
Total billings $ 413,419
$ 428,077
$ 796,975
$ 808,075

•

Professional services revenue — We also sell professional services with our products. We recognize revenue related to professional services as they are performed.

Table of Contents

NUTANIX, INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Non-GAAP Financial Measures and Key Performance Measures

We regularly monitor total billings, subscription billings, professional services billings, ~~software and support~~ACV billings, ~~(TCV billings),~~run-rate ACV, adjusted gross profit, adjusted gross margin, free cash flow and non-GAAP operating expenses, which are non-GAAP financial measures and key performance measures, to help us evaluate our growth and operational efficiencies, measure our performance, identify trends in our sales activity and establish our budgets. We evaluate these measures because they:

•

are used by management and the Board of Directors to understand and evaluate our performance and trends, as well as to provide a useful measure for period-to-period comparisons of our core business;

~~are used by management and the Board of Directors to understand and evaluate our performance and trends, as well as to provide a useful measure for period-to-period comparisons of our core business;~~

•

are widely used as a measure of financial performance to understand and evaluate companies in our industry; and

~~are widely used as a measure of financial performance to understand and evaluate companies in our industry;~~

•

are used by management to prepare and approve our annual budget and to develop short-term and long-term operational and compensation plans, as well as to assess our actual performance against our goals.

Total billings ~~subscription billings, professional services billings and software and support billings (TCV billings) are~~is a performance ~~measures~~measure which ~~management believes provide~~we believe provides useful information to investors, as ~~they represent~~it represents the dollar value under binding purchase orders received and billed during a given period. Subscription billings and professional services billings are performance measures that we believe provide useful information to our management and investors as they allow us to better track the growth of the subscription-based portion of our business, which is a critical part of our business plan. ACV billings and run-rate ACV are performance measures that we believe provide useful information to our management and investors, in particular as we progress further on our subscription-based business model transition, as they allow us to better track the top-line growth of our business during our transition to a subscription-based business model because they take into account variability in term lengths. Free cash flow is a performance measure that we believe provides useful information to management and investors about the amount of cash used in or generated by the business after necessary capital expenditures. Adjusted gross profit, adjusted gross margin and non-GAAP operating expenses are performance measures which ~~management believes~~we believe provide useful information to investors, as 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. 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.

Total billings, subscription billings, professional services billings, ~~software and support~~ACV billings, ~~(TCV billings),~~run-rate ACV, adjusted gross profit, adjusted gross margin, free cash flow and non-GAAP operating expenses have limitations as analytical tools and they should not be considered in isolation or as substitutes for analysis of our results as reported under generally accepted accounting principles in the United States. Total billings, subscription billings, professional services billings, ~~software and support billings (TCV billings),~~ adjusted gross profit, adjusted gross margin, free cash flow and non-GAAP operating expenses are not substitutes for total revenue, subscription revenue, professional services revenue, ~~software and support revenue (TCV revenue),~~ gross profit, gross margin, cash provided by (used in) operating activities, or GAAP operating expenses, respectively. There is no GAAP measure that is comparable to either ACV billings or run-rate ACV, so we have not reconciled either ACV billings or run-rate ACV numbers included in this Quarterly Report on Form 10-Q 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 and not to rely on any single financial measure to evaluate our business.

We calculate our non-GAAP financial and key performance measures as follows:

Total billings — We calculate total billings by adding the change in deferred revenue ~~net of acquisitions,~~ between the start and end of the period to total revenue recognized in the same period.

Subscription billings— We calculate subscription billings by adding the change in subscription deferred revenue ~~net of acquisitions,~~ between the start and end of the period to subscription revenue recognized in the same period.

Professional services billings— We calculate professional services billings by adding the change in professional services deferred revenue ~~net of acquisitions,~~ between the start and end of the period to professional services revenue recognized in the same period.

~~Software~~Table of Contents

NUTANIX, INC.

Management's Discussion and ~~support~~Analysis of Financial Condition and Results of Operations (Continued)

ACV billings ~~(TCV billings)~~— We calculate ~~software~~ACV billings as the sum of the ACV for all contracts billed during the period. ACV is defined as the total annualized value of a contract, excluding amounts related to professional services and ~~support billings, also referred to~~hardware. We calculate the total annualized value for a contract by dividing the total value of the contract by the number of years in the term of the contract, using, where applicable, an assumed term of five years for contracts that do not have a specified term.

Run-rate ACV — We calculate run-rate ACV as ~~TCV billings, by adding~~ the ~~change~~sum of ACV for all contracts that are in ~~software and support deferred revenue (TCV deferred revenue), net~~effect as of ~~acquisitions, between~~ the ~~start and~~ end of the ~~period to software and support~~period. For the purposes of this calculation, we assume that the contract term begins on the date a contract is booked, irrespective of the periods in which we would recognize revenue ~~(TCV revenue), recognized in the same period. Software and support revenue and billings (TCV revenue and billings) include software and support, entitlements and other services revenue and billings.~~for such contract.

Adjusted gross profit and adjusted gross margin — We calculate adjusted gross margin as adjusted gross profit divided by total revenue. We define adjusted gross profit as gross profit adjusted to exclude stock-based compensation expense, ~~and~~ the amortization of acquired intangible ~~assets.~~assets and costs associated with other non-recurring transactions. Our presentation of adjusted gross profit should not be construed as implying that our future results will not be affected by any recurring expenses or any unusual or non-recurring items that we exclude from our calculation of this non-GAAP financial measure.

Free cash flow — We calculate free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment, which measures our ability to generate cash from our business operations after our capital expenditures.

Non-GAAP operating expenses — We define non-GAAP operating expenses as total operating expenses adjusted to exclude stock-based compensation expense, costs associated with business combinations, such as amortization of acquired intangible assets, revaluation of contingent consideration and other acquisition-related costs and costs associated with other non-recurring transactions. Our presentation of non-GAAP operating expenses should not be construed as implying that our future results will not be affected by any recurring expenses or any unusual or non-recurring items that we exclude from our calculation of this non-GAAP financial measure.

Table of Contents

NUTANIX, INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

The following table presents a reconciliation of total billings, adjusted gross profit, adjusted gross margin, non-GAAP operating expenses and free cash flow ~~and non-GAAP operating expenses~~ to the most directly comparable GAAP financial measures, for each of the periods indicated:

	Three Months Ended January 31,						Six Months Ended January 31,
	2020			2021			2020			2021
	(in thousands, except percentages)
Total revenue	$	346,767		$	346,382		$	661,535		$	659,136
Change in deferred revenue		81,310			39,131			146,540			61,325
Total billings (non-GAAP)	$	428,077		$	385,513		$	808,075		$	720,461

Gross profit	$	271,544		$	275,428		$	514,111		$	520,223
Stock-based compensation		6,598			7,423			12,461			14,688
Amortization of intangible assets		3,694			3,694			7,388			7,388
Impairment of lease-related assets		537			—			537			287
Adjusted gross profit (non-GAAP)	$	282,373		$	286,545		$	534,497		$	542,586

Gross margin		78.3	%		79.5	%		77.7	%		78.9	%
Stock-based compensation		1.8	%		2.1	%		1.9	%		2.2	%
Amortization of intangible assets		1.1	%		1.1	%		1.1	%		1.1	%
Impairment of lease-related assets		0.2	%		0.0	%		0.1	%		0.1	%
Adjusted gross margin (non-GAAP)		81.4	%		82.7	%		80.8	%		82.3	%

Operating expenses	$	478,603		$	431,676		$	941,507		$	858,544
Stock-based compensation		(79,017	)		(77,031	)		(154,580	)		(158,964	)
Amortization of intangible assets		(651	)		(651	)		(1,302	)		(1,302	)
Impairment of lease-related assets		(2,465	)		—			(2,465	)		(2,535	)
Other		(154	)		(467	)		(507	)		(973	)
Operating expenses (non-GAAP)	$	396,316		$	353,527		$	782,653		$	694,770

Net cash used in operating activities	$	(52,491	)	$	(15,557	)	$	(78,654	)	$	(19,630	)
Purchases of property and equipment		(21,248	)		(12,916	)		(39,451	)		(25,168	)
Free cash flow (non-GAAP)	$	(73,739	)	$	(28,473	)	$	(118,105	)	$	(44,798	)

Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands, except percentages)
Total revenue $ 335,360
$ 346,767
$ 648,643
$ 661,535
Change in deferred revenue, net of acquisitions ⁽¹⁾
78,059
81,310
148,332
146,540
Total billings (non-GAAP) $ 413,419
$ 428,077
$ 796,975
$ 808,075

Gross profit $ 249,378
$ 271,544
$ 488,555
$ 514,111
Stock-based compensation 4,245
6,598
8,100
12,461
Amortization of intangible assets 3,692
3,694
6,860
7,388
Impairment of lease-related assets —
537
—
537
Other 163
—
163
—
Adjusted gross profit (non-GAAP) $ 257,478
$ 282,373
$ 503,678
$ 534,497

Gross margin 74.4 %
78.3 %
75.3 % 77.7 %
Stock-based compensation 1.3 %
1.8 %
1.3 % 1.9 %
Amortization of intangible assets 1.1 %
1.1 %
1.1 % 1.1 %
Impairment of lease-related assets — % 0.2 % — % 0.1 %
Other — % — % — % — %
Adjusted gross margin (non-GAAP) 76.8 %
81.4 %
77.7 % 80.8 %

Operating expenses $ 365,532
$ 478,603
$ 699,899
$ 941,507
Stock-based compensation (68,320 ) (79,017 ) (130,390 ) (154,580 )
Amortization of intangible assets (666 ) (651 ) (1,216 ) (1,302 )
Impairment of lease-related assets —
(2,465 ) —
(2,465 )
Other (44 ) (154 ) 274
(507 )
Operating expenses (non-GAAP) $ 296,502
$ 396,316
$ 568,567
$ 782,653

Net cash provided by (used in) operating activities $ 38,490
$ (52,491 ) $ 88,314
$ (78,654 )
Purchases of property and equipment (42,551 ) (21,248 ) (72,383 ) (39,451 )
Free cash flow (non-GAAP) $ (4,061 ) $ (73,739 )
$ 15,931

$ (118,105 )


~~(1)~~	~~Amount for the six months ended January 31, 2019 excludes approximately $0.3 million of deferred revenue assumed in an acquisition.~~

The following table presents a reconciliation of subscription billings and professional services billings ~~and software and support billings (TCV billings)~~ to the most directly comparable GAAP financial measures, for each of the periods indicated:

	Three Months Ended January 31,				Six Months Ended January 31,
	2020		2021		2020		2021
	(in thousands)
Subscription revenue	$	266,544	$	305,946	$	484,440	$	584,111
Change in subscription deferred revenue		72,598		33,222		130,240		48,980
Subscription billings	$	339,142	$	339,168	$	614,680	$	633,091

Professional services revenue	$	12,550	$	17,454	$	22,127	$	31,271
Change in professional services deferred revenue		8,712		5,909		16,300		12,345
Professional services billings	$	21,262	$	23,363	$	38,427	$	43,616

Three Months Ended
January 31, Six Months Ended
January 31,
2019 2020 2019 2020

(in thousands)
Subscription revenue $ 157,356
$ 266,544
$ 284,332
$ 484,440
Change in subscription deferred revenue, net of acquisitions ⁽²⁾
76,260
72,598
144,048
130,240
Subscription billings $ 233,616
$ 339,142
$ 428,380
$ 614,680

Professional services revenue $ 8,464
$ 12,550
$ 15,654
$ 22,127
Change in professional services deferred revenue 1,799
8,712
4,284
16,300
Professional services billings $ 10,263
$ 21,262
$ 19,938
$ 38,427

Software revenue $ 199,013
$ 205,005
$ 390,812
$ 387,725
Hardware revenue 37,919
8,542
70,466
18,266
Product revenue 236,932
213,547
461,278
405,991
Support, entitlements and other services revenue 98,428
133,220
187,365
255,544
Total revenue $ 335,360
$ 346,767
$ 648,643
$ 661,535

Software and support revenue (TCV revenue) ⁽¹⁾
$ 297,441
$ 338,225
$ 578,177
$ 643,269
Change in software and support deferred revenue (TCV deferred revenue), net of acquisitions ⁽²⁾
78,059
81,310
148,332
146,540
Software and support billings (TCV billings) ⁽¹⁾
$ 375,500
$ 419,535
$ 726,509
$ 789,809


~~(1)~~	~~Software and support revenue and billings (TCV revenue and billings) include software and support, entitlements and other services revenue and billings.~~


~~(2)~~	~~Amount for the~~ ~~six~~ ~~months ended~~ ~~January 31, 2019~~ ~~excludes approximately $0.3 million of deferred revenue assumed in an acquisition.~~

Table of Contents

NUTANIX, INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Factors Affecting Our Performance

We believe that our future success will depend on many factors, including those described below. While these areas present significant opportunity, they also present risks that we must manage to achieve successful results. See the section titled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for our fiscal year ended July 31, 2020 for details. If we are unable to address these challenges, our business and operating results could be materially and adversely affected.

Investment in Growth

We plan to, in the long term, ~~continue to~~ invest in sales and marketing so that we can capitalize on our market opportunity, including growing our sales and marketing teams, continuing our focus on opportunities with major accounts and large deals, which we define as transactions over $500,000, expanding our focus on opportunities in commercial accounts, as well as other sales and marketing initiatives, such as ~~additional~~ demand generation spending to increase our pipeline growth. WeAs discussed above in the section titled "Impact of the COVID-19 Pandemic," both in response to the COVID-19 pandemic and as part of our overall efforts to improve our operating cash flow performance, we have ~~significantly increased~~proactively taken steps to reduce our expenses and, as a result, our overall sales and marketing ~~personnel, which grew by approximately 42% from January 31, 2019 to January 31, 2020.~~expense will fluctuate, and may decline, in the near term. We estimate, based on past experience, that our average sales team members typically become fully ramped up around the start of their fourth quarter of employment with us, and as our newer employees ramp up, we expect their increased productivity to contribute to our revenue growth. As of January 31, ~~2020,~~2021, we considered approximately ~~51%~~81% of our global sales team members to be fully ramped, while the remaining approximately ~~49%~~19% of our global sales team members are in the process of ramping up. As we continue to focus some of our ~~new~~newer and existing sales team members on major accounts and large deals, and as we continue our transition toward a subscription-based business model, it may take longer, potentially significantly, for these sales team members to become fully productive, and there may also be an impact to the overall productivity of our sales team. Furthermore, the effects of the COVID-19 pandemic and the measures we have implemented in response, including postponing, cancelling or making virtual-only certain in-person corporate events at which our sales team members have historically received in-person sales enablement and related trainings, may further increase, potentially significantly, the time it takes for our sales team members to become fully productive. We are focused on actively managing these ~~realignments.~~realignments and potential effects. We intend to continue investing in ~~the long term,~~our growth, while improving our operating cash flow performance by continuing to ~~grow~~maintain our global sales and marketing team and continue to invest in sales and marketing initiatives to acquire new end customers and to increase sales to existing end customers. However, as disclosed in February 2020, for the second half of fiscal 2020focus on go-to-market efficiencies. By maintaining this balance, we ~~have taken a pause on a significant portion of~~believe we can drive toward our ~~planned headcount outside of our sales teams and a few other select roles. We decided to~~

~~implement this headcount pause (i) due to the uncertainty surrounding, and the~~high growth potential impact of, the ongoing outbreak of a respiratory illness caused by the 2019 novel coronavirus that was recently named by the World Health Organization as COVID-19, and (ii) to put ourselves in a better position to more efficiently integrate the approximately 1,400 employees we have added across all departments globally between January 31, 2019 to January 31, 2020. As a result,without sacrificing our overall ~~spending on sales and marketing efforts may fluctuate from quarter to quarter in the near term.~~

financial health.

We also intend, in the long term, ~~to continue~~ to grow our global research and development and engineering teams to enhance our solutions, including our newer subscription-based products, improve integration with new and existing ecosystem partners and broaden the range of technologies and features available through our platform. However, as ~~disclosed~~discussed above in ~~February 2020, for~~ the ~~second half~~section titled "Impact of ~~fiscal 2020~~the COVID-19 Pandemic," in response to the COVID-19 pandemic we ~~have taken~~had previously effected a global hiring pause ~~on a significant portion of our planned headcount~~ outside of ~~our sales teams and~~ a ~~few other select~~small number of critical roles and, ~~as a result,~~while the hiring pause is no longer in effect, the overall growth in our global research and development and engineering teams may fluctuate from quarter to quarter in the near-term.

We believe that these investments will contribute to our long-term growth, although they may adversely affect our profitability in the near term.

Table of Contents

NUTANIX, INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Transition to Subscription

Starting in fiscal 2019, as a result of our transition towards a subscription-based business model, more of our customers began purchasing separately sold subscription term-based licenses that could be deployed on a variety of hardware platforms. As we continue our transition to a subscription-based business model, we expect a greater portion of our products to be delivered through subscription term-based licenses or cloud-based SaaS subscriptions. Shifts in the mix of whether our solutions are sold on a subscription basis have and could continue to result in fluctuations in our billings and revenue. Subscription sales consist of subscription term-based licenses and offerings with ongoing performance obligations, including software entitlement and support subscriptions and cloud-based SaaS offerings. Since revenue is recognized as performance obligations are delivered, sales with ongoing performance obligations may reflect lower revenue in a given period. In addition, other factors relating to our shift to selling more subscription term-based licenses may impact our billings, revenue and ~~revenue.~~cash flow. For example, our term-based licenses generally have an average term of less than four years and thus result in lower billings and revenue in a given period when compared to our historical life of device license sales, which have a duration equal to the life of the associated appliance, which we estimate to be approximately five years.

In addition, starting in fiscal 2021, we began compensating our sales force based on ACV instead of total contract value, and while we expect that the shift to an ACV-based sales compensation plan will incentivize sales representatives to maximize ACV and minimize discounts, it could also further compress the average term of our subscription term-based licenses. Furthermore, our customers may, including in response to the uncertainty caused by the COVID-19 pandemic, decide to purchase our software solutions on shorter subscription terms than they have historically, and/or request to only pay for the initial year of a multi-year subscription term upfront, which could negatively impact our billings, revenue and cash flow in a given period when compared to historical life-of-device or multiple-year term-based license sales.

Revenue for our solutions, whether or not sold as a subscription term-based license, is generally recognized upon transfer of control to the customer. For additional information on revenue recognition, see Note 2 of Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Market Adoption of Our Products

The public cloud and, more recently, hybrid cloud paradigms, have changed IT buyer expectations about the simplicity, agility, scalability, portability and pay-as-you-grow economics of IT resources, which represent a major architectural shift and business model evolution. A key focus of our sales and marketing efforts is creating market awareness about the benefits of our enterprise cloud ~~platform, including~~platform. This includes our newer products outside of our core hyperconverged infrastructure ~~("HCI")~~ offering, both as compared to traditional datacenter architectures as well as the public cloud, particularly as we continue to pursue large enterprises and mission critical workloads and transition toward a subscription-based business model. The broad nature of the technology shift that our enterprise cloud platform represents, the relationships our end customers have with existing IT vendors, and our transition toward a subscription-based ~~consumption~~business model sometimes lead to unpredictable sales ~~cycles, which we~~cycles. We hope to compress and stabilize these sales cycles as market adoption increases, as we gain leverage with our channel partners, as we continue to educate the market about our subscription-based business model and as our sales and marketing efforts ~~expand.~~evolve. Our business and operating results will be significantly affected by the degree to and speed with which organizations adopt our enterprise cloud platform.

Leveraging Channel Partners and OEMs

We plan to continue to strengthen and expand our network of channel partners and OEMs to increase sales to both new and existing end customers. We believe that increasing channel leverage, particularly as we expand our focus on opportunities in commercial accounts, by investing ~~aggressively~~ in sales enablement and co-marketing with our partners and OEMs in the long term will extend and improve our engagement with a broad set of end customers. Our business and results of operations will be significantly affected by our success in leveraging and expanding our network of channel partners and OEMs.

Table of Contents

NUTANIX, INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Customer Retention and Expansion

Our end customers typically deploy our technology for a specific workload initially. After a new end customer's initial order, which includes the product and associated software entitlement and support subscription and services, we focus on expanding our footprint by serving more workloads. We also generate recurring revenue from our software entitlement and support subscription ~~renewals.~~renewals, and given our transition to a subscription-focused business model, software and support renewals will have an increasing significance for our future revenue streams as existing subscriptions come up for renewal. We view continued purchases and upgrades as critical drivers of our success, as the sales cycles are typically shorter as compared to new end customer deployments, and selling efforts are typically less. As of January 31, ~~2020,~~2021, approximately ~~67%~~68% of our end customers who have been with us for 18 months or longer have made a repeat purchase, which is defined as any purchase activity, including renewals of term-based licenses or software entitlement and support subscription renewals, after the initial purchase. Additionally, end customers who have been with us for 18 months or longer have total lifetime orders, including the initial order, in an amount that is more than ~~4.0x~~6.0x greater, ~~or 4.5x greater excluding the value of hardware purchases,~~ on average, than their initial order. This number increases to approximately ~~11.2x, or 12.6x excluding hardware,~~15.7x, on average, for Global 2000 end customers who have been with us for 18 months or longer as of January 31, ~~2020.~~2021. These multiples exclude the effect of one end customer who had a very large and irregular purchase pattern that we believe is not representative of the purchase patterns of all of our other end customers.

Our business and operating results will depend on our ability to retain and sell additional products to our existing and future base of end customers. Our ability to obtain new and retain existing customers ~~and expand our customer base~~ will in turn depend in part on a number of factors. These factors include our ability to effectively maintain existing and future customer relationships, continue to innovate by adding new functionality and improving usability of our solutions in a manner that addresses our end customers’ needs and requirements, and optimally price our solutions in light of marketplace conditions, competition, our costs and customer demand. Furthermore, our ongoing transition to a subscription-based business model may cause concerns among our customer base, including concerns regarding changes to pricing over time, and may also result in confusion among new and existing end customers, for example, regarding our pricing models. Such concerns and/or confusion can slow adoption and renewal rates among our current and future customer base. Therefore, as we continue our transition, we may need to enhance our efforts to educate our end customers and as a result incur higher sales and marketing costs.

Components of Our Results of Operations

Revenue

We generate revenue primarily from the sale of our enterprise cloud platform, 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 an appliance that is configured to order. Non-portable software islicenses are delivered or sold alongside configured-to-order appliances ~~with a license term equal to~~and can be used over the life of the associated appliance.

Our subscription term-based licenses are sold separately, or can be sold alongside configured-to-order appliances. Our subscription term-based licenses typically have a term of one to five years. Our cloud-based SaaS subscriptions have terms extending up to five years.

Configured-to-order appliances, including our Nutanix-branded NX hardware line, can be purchased from one of our channel partners, OEMs or in limited cases, directly from Nutanix. Our enterprise cloud platform is typically purchased with one or more years of support and entitlements, which includes the right to software upgrades and enhancements as well as technical support. Our platform is primarily sold through channel partners, including distributors, resellers and OEMs.

Product revenue — Product revenue consists of software and hardware revenue. A majority of our product revenue is generated from the sale of our enterprise cloud operating system. We also sell renewals of previously purchased software licenses and SaaS offerings. Revenue from our software products is generally recognized upon transfer of control to the customer, which is typically upon shipment for sales including a hardware appliance, upon making the software available to the customer when not sold with an appliance or as services are performed with SaaS offerings. In transactions where ~~we deliver~~ the hardware appliance 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. We consider the amount allocated to hardware revenue to be equivalent to the cost of the hardware procured. Hardware revenue is generally recognized upon transfer of control to the customer.

Table of Contents

NUTANIX, INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Support, entitlements and other services revenue — We generate our support, entitlements and other services revenue primarily from software entitlement 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 entitlement and support subscriptions, with terms ranging from one to five years. Occasionally, we also sell professional services with our products. We recognize revenue from software entitlement and support contracts ratably over the contractual service period. The service period typically commences upon transfer of control of the corresponding products to the customer. We recognize revenue related to professional services as they are performed.



	As of
	July 31, 2019			January 31, 2020

	(in thousands, except per share data)
Assets
Current assets:
Cash and cash equivalents	$	396,678		$	211,693
Short-term investments	512,156			607,307
Accounts receivable, net	245,475			247,323
Deferred commissions—current	46,238			59,603
Prepaid expenses and other current assets	74,665			65,708
Total current assets	1,275,212			1,191,634
Property and equipment, net	136,962			143,430
Operating lease right-of-use assets⁽¹⁾	—			135,680
Deferred commissions—non-current	107,474			129,531
Intangible assets, net	66,773			58,083
Goodwill	185,180			185,260
Other assets—non-current	14,441			19,698
Total assets	$	1,786,042		$	1,863,316

Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	74,047		$	76,542
Accrued compensation and benefits	99,804			119,889
Accrued expenses and other current liabilities⁽¹⁾	28,797			23,874
Deferred revenue—current	396,667			472,680
Operating lease liabilities—current⁽¹⁾	—			31,668
Total current liabilities	599,315			724,653
Deferred revenue—non-current	513,377			583,904
Operating lease liabilities—non-current⁽¹⁾	—			129,420
Convertible senior notes, net	458,910			474,308
Other liabilities—non-current⁽¹⁾	27,547			17,133
Total liabilities	1,599,149			1,929,418
Commitments and contingencies (Note 7)
Stockholders’ equity (deficit):
Preferred stock, par value of $0.000025 per share— 200,000 shares authorized as of July 31, 2019 and January 31, 2020; no shares issued and outstanding as of July 31, 2019 and January 31, 2020	—			—
Common stock, par value of $0.000025 per share—1,200,000 (1,000,000 Class A, 200,000 Class B) shares authorized as of July 31, 2019 and January 31, 2020; 188,595 (168,155 Class A and 20,440 Class B) and 194,654 (179,562 Class A and 15,092 Class B) shares issued and outstanding as of July 31, 2019 and January 31, 2020	5			5
Additional paid-in capital	1,835,528			2,028,928
Accumulated other comprehensive income	669			1,138
Accumulated deficit	(1,649,309		)	(2,096,173		)
Total stockholders’ equity (deficit)	186,893			(66,102		)
Total liabilities and stockholders’ equity (deficit)	$	1,786,042		$	1,863,316



	Three Months Ended January 31,						Six Months Ended January 31,
	2019			2020			2019			2020

	(in thousands, except per share data)
Revenue:
Product	$	236,932		$	213,547		$	461,278		$	405,991
Support, entitlements and other services	98,428			133,220			187,365			255,544
Total revenue	335,360			346,767			648,643			661,535
Cost of revenue:
Product	45,966			20,676			85,227			41,909
Support, entitlements and other services	40,016			54,547			74,861			105,515
Total cost of revenue	85,982			75,223			160,088			147,424
Gross profit	249,378			271,544			488,555			514,111
Operating expenses:
Sales and marketing	213,707			304,936			410,204			596,774
Research and development	123,037			139,088			233,568			277,294
General and administrative	28,788			34,579			56,127			67,439
Total operating expenses	365,532			478,603			699,899			941,507
Loss from operations	(116,154		)	(207,059		)	(211,344		)	(427,396		)
Other expense, net	(4,399		)	(5,863		)	(7,102		)	(10,903		)
Loss before provision for (benefit from) income taxes	(120,553		)	(212,922		)	(218,446		)	(438,299		)
Provision for (benefit from) income taxes	2,210			4,642			(1,418		)	8,565
Net loss	$	(122,763	)	$	(217,564	)	$	(217,028	)	$	(446,864	)
Net loss per share attributable to Class A and Class B common stockholders—basic and diluted	$	(0.68	)	$	(1.13	)	$	(1.22	)	$	(2.34	)
Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders—basic and diluted	179,445			192,727			177,428			191,199



	Six Months Ended January 31, 2019
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Equity

	(in thousands)
Balance - July 31, 2018	172,858	$	4	$	1,355,907	$	(1,002	)	$	(1,028,130	)	$	326,779
Issuance of common stock through employee equity incentive plans	2,629	—		3,680		—			—			3,680
Issuance of common stock from ESPP purchase	1,128	—		26,318		—			—			26,318
Issuance of common stock in connection with an acquisition	2,451	—		102,978		—			—			102,978
Stock-based compensation	—	—		65,925		—			—			65,925
Vesting of early exercised stock options	—	—		70		—			—			70
Other comprehensive loss	—	—		—		(166		)	—			(166		)
Net loss	—	—		—		—			(94,265		)	(94,265		)
Balance - October 31, 2018	179,066	4		1,554,878		(1,168		)	(1,122,395		)	431,319
Issuance of common stock through employee equity incentive plans	2,968	—		3,341		—			—			3,341
Stock-based compensation	—	—		72,565		—			—			72,565
Vesting of early exercised stock options	—	—		50		—			—			50
Other comprehensive income	—	—		—		1,019			—			1,019
Net loss	—	—		—		—			(122,763		)	(122,763		)
Balance - January 31, 2019	182,034	$	4	$	1,630,834	$	(149	)	$	(1,245,158	)	$	385,531



	As of July 31, 2019
	Level I		Level II		Level III		Total

	(in thousands)
Financial Assets:
Cash equivalents:
Money market funds	$	33,156	$	—	$	—	$	33,156
Commercial paper	—		103,029		—		103,029
U.S. government securities	—		119,933		—		119,933
Corporate bonds	—		9,996		—		9,996
Short-term investments:
Corporate bonds	—		354,549		—		354,549
Commercial paper	—		92,851		—		92,851
U.S. government securities	—		64,756		—		64,756
Total measured at fair value	$	33,156	$	745,114	$	—	$	778,270
Cash							130,564
Total cash, cash equivalents and short-term investments							$	908,834



	As of January 31, 2020
	Level I		Level II		Level III		Total

	(in thousands)
Financial Assets:
Cash equivalents:
Money market funds	$	29,792	$	—	$	—	$	29,792
Commercial paper	—		3,498		—		3,498
U.S. government securities	—		3,670		—		3,670
Corporate bonds	—		2,050		—		2,050
Short-term investments:
Corporate bonds	—		395,673		—		395,673
Commercial paper	—		115,762		—		115,762
U.S. government securities	—		95,872		—		95,872
Total measured at fair value	$	29,792	$	616,525	$	—	$	646,317
Cash							172,683
Total cash, cash equivalents and short-term investments							$	819,000



	As of July 31, 2019				As of January 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value

	(in thousands)
Convertible senior notes, net	$	458,910	$	527,275	$	474,308	$	580,463



	As of January 31, 2020
	(in thousands)
Due within one year	$	441,622
Due in one to two years	165,685
Total	$	607,307



	As of
	July 31, 2019		January 31, 2020

	(in thousands)
Prepaid operating expenses	$	37,864	$	37,541
Tenant improvement allowances	—		7,930
VAT receivables	5,068		6,516
Prepaid income taxes	19,690		1,548
Other current assets	12,043		12,173
Total prepaid expenses and other current assets	$	74,665	$	65,708



	Number of Shares		Grant Date Fair Value per Share
	(in thousands)
Outstanding at July 31, 2019	22,136		$	36.72
Granted	10,511		$	29.47
Released	(4,236	)	$	33.72
Forfeited	(2,787	)	$	34.34
Outstanding at January 31, 2020	25,624		$	34.61



	Three and Six Months Ended January 31,
	2019	2020

	(in thousands)
Outstanding stock options and RSUs	31,898	33,500
Employee stock purchase plan	1,527	2,793
Contingently issuable shares pursuant to business combinations	920	611
Common stock subject to repurchase	15	—
Common stock warrants	34	34
Total	34,394	36,938

	Three Months Ended January 31,				Change						Six Months Ended January 31,				Change
	2020		2021		$			%			2020		2021		$			%
	(in thousands, except percentages)
Product	$	213,547	$	174,798	$	(38,749	)		(18	)%	$	405,991	$	330,550	$	(75,441	)		(19	)%
Support, entitlements and other services		133,220		171,584		38,364			29	%		255,544		328,586		73,042			29	%
Total revenue	$	346,767	$	346,382	$	(385	)		(0	)%	$	661,535	$	659,136	$	(2,399	)		(0	)%

	Payments Due by Period
	Total		Less than 1 Year		1 Year to 3 Years		3 to 5 Years		More than 5 Years
	(in thousands)
Principal amount payable on convertible senior notes ⁽¹⁾	$	1,325,000	$	—	$	575,000	$	—	$	750,000
Paid-in-kind interest on convertible senior notes ⁽¹⁾		6,615		—		—		—		6,615
Operating leases (undiscounted basis) ⁽²⁾		166,485		49,537		91,919		21,642		3,387
Other commitments ⁽³⁾		63,410		55,099		5,983		2,328		—
Guarantees with OEMs		66,925		36,925		30,000		—		—
Total	$	1,628,435	$	141,561	$	702,902	$	23,970	$	760,002



	Payments Due by Period
	Total		Less than 1 Year		1 Year to 3 Years		3 to 5 Years		More than 5 Years

	(in thousands)
Principal amount payable on convertible senior notes ⁽¹⁾	$	575,000	$	—	$	575,000	$	—	$	—
Operating leases (undiscounted basis) ⁽²⁾	188,322		40,884		86,478		55,607		5,353
Other commitments ⁽³⁾	95,723		90,953		4,739		31		—
Guarantees with contract manufacturers and OEMs	134,880		104,129		30,751		—		—
Total	$	993,925	$	235,966	$	696,968	$	55,638	$	5,353


(1)	For additional information regarding our convertible senior notes, refer to Note 5 of Part I, Item 1 of this Quarterly Report on Form 10-Q.


(3)	Purchase obligations and other commitments pertaining to our daily business operations.



		Incorporated by Reference
Number	Exhibit Title	Form	File No.	Exhibit	Filing Date	Filed Herewith
~~10.1+~~ 10.1††	~~Amended~~Amendment Three to Original Equipment Manufacturer (OEM) Purchase Agreement, dated as of December 20, 2020, by and ~~Restated 2016 Employee Stock Purchase Plan~~between Nutanix, Inc. and ~~forms of equity agreements thereunder~~Super Micro Computer Inc.					X
10.2+	Offer Letter, dated as of ~~October 29, 2019,~~December 7, 2020, by and between ~~the Registrant~~Nutanix, Inc. and ~~Tarkan Maner~~Rajiv Ramaswami.	8-K	001-37883	10.1	12/09/2020	X
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XRBL tags are embedded within the Inline XBRL document					X
101.SCH	XBRL Taxonomy Extension Schema Document					X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document					X
101.	XBRL Taxonomy Extension Definition					X
101.	XBRL Taxonomy Extension Label Linkbase					X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document					X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)					X



Date: March ~~5, 2020~~4, 2021		/s/ Duston M. Williams
		Duston M. Williams
		Chief Financial Officer
		(Principal Financial Officer)