Nutanix, Inc. (NTNX) Cash Flow Statement

The consistent generation of operating cash flow significantly above net income indicates strong underlying cash conversion, driven by subscription prepayments and non-cash adjustments like stock-based compensation. However, the $1.3B net income in 2026Q4, which appears to include substantial one-time items, creates a misleadingly low OCF/NI ratio of 0.25 for that period. This volatility suggests analysts must look beyond GAAP net income to assess the business's true cash generation power.

The FCF trajectory has evolved from volatile and lower-margin (e.g., 14.9% in 2024Q3) to consistently high-margin and growing in absolute terms, culminating in $277.6M of FCF in the latest quarter. This trend appears directly tied to operating leverage as revenue scales past the fixed cost base, with FCF now substantially outpacing net income. The improvement suggests the business model is becoming highly efficient at translating revenue growth into distributable cash.

The minimal capital expenditure, averaging roughly $20M per quarter, reflects the company's software-centric architecture and absence of significant hardware manufacturing or data center infrastructure requirements. This low capital intensity is a structural advantage, ensuring that growth does not require proportionate capital reinvestment and thereby protecting free cash flow margins. For investors, this profile means that operating cash flow growth translates almost directly into shareholder value generation.

The volatility in working capital changes suggests that cash flow from operations is subject to the timing of large subscription billings and customer payments, which is typical for enterprise software. The large positive swings, like in 2024Q4 and 2025Q4, likely reflect upfront collections on annual or multi-year contracts. Investors should focus on the multi-quarter trend in operating cash flow rather than quarter-over-quarter working capital changes to assess the business's underlying health.