Nutanix, Inc. Fair Value Disclosure
NOTE 3. FAIR VALUE MEASUREMENTS
The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value as follows:
Assets Measured at Fair Value on a Recurring Basis
Cash Equivalents and Short-Term Investments
Our money market funds are classified within Level I due to the highly liquid nature of these assets and have unadjusted inputs, quoted prices in active markets for these assets at the measurement date from the financial institution that carries these investment securities. Our investments in available-for-sale debt securities such as commercial paper, corporate bonds and U.S. government securities are classified within Level II. The fair value of these securities is priced by using inputs based on non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques.
Convertible Note Receivable
In May 2023, we sold our Frame Desktop-as-a-Service business. As part of the consideration for the sale, we received a $5.0 million interest-bearing convertible note. We have elected the fair value option for the convertible note and will record the changes in its fair value at each reporting period. As of July 31, 2025, the fair value of the convertible note was determined to be approximately $5.5 million. We consider this convertible note to be classified within Level III. The fair value is determined by considering the convertible note’s principal and accrued interest, as well as the convertible note’s option to convert into equity securities, using inputs including debt yields, volatility data, and the value of the underlying equity into which the convertible note could be converted.
The fair value of our financial assets measured on a recurring basis is as follows:
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As of July 31, 2024 |
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|
Level I |
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|
Level II |
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|
Level III |
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|
Total |
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||||
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(in thousands) |
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|||||||||||||
Financial Assets, Current: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
352,295 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
352,295 |
|
U.S. Government securities |
|
|
— |
|
|
|
99 |
|
|
|
— |
|
|
|
99 |
|
Commercial paper |
|
|
— |
|
|
|
1,747 |
|
|
|
— |
|
|
|
1,747 |
|
Short-term investments: |
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|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds |
|
|
— |
|
|
|
233,065 |
|
|
|
— |
|
|
|
233,065 |
|
Commercial paper |
|
|
— |
|
|
|
33,770 |
|
|
|
— |
|
|
|
33,770 |
|
U.S. Government securities |
|
|
— |
|
|
|
72,237 |
|
|
|
— |
|
|
|
72,237 |
|
Total measured at fair value |
|
$ |
352,295 |
|
|
$ |
340,918 |
|
|
$ |
— |
|
|
$ |
693,213 |
|
Cash |
|
|
|
|
|
|
|
|
|
|
|
301,129 |
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|||
Total cash, cash equivalents and short-term investments |
|
|
|
|
|
|
|
|
|
|
$ |
994,342 |
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Financial Assets, Non-Current: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Convertible note receivable |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
5,150 |
|
|
$ |
5,150 |
|
|
|
As of July 31, 2025 |
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|
|
Level I |
|
|
Level II |
|
|
Level III |
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|
Total |
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||||
|
|
(in thousands) |
|
|||||||||||||
Financial Assets, Current: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
371,762 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
371,762 |
|
U.S. Government securities |
|
|
— |
|
|
|
21,703 |
|
|
|
— |
|
|
|
21,703 |
|
Commercial paper |
|
|
— |
|
|
|
13,068 |
|
|
|
— |
|
|
|
13,068 |
|
Short-term investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds |
|
|
— |
|
|
|
647,074 |
|
|
|
— |
|
|
|
647,074 |
|
Commercial paper |
|
|
— |
|
|
|
163,055 |
|
|
|
— |
|
|
|
163,055 |
|
U.S. Government securities |
|
|
— |
|
|
|
413,105 |
|
|
|
— |
|
|
|
413,105 |
|
Total measured at fair value |
|
$ |
371,762 |
|
|
$ |
1,258,005 |
|
|
$ |
— |
|
|
$ |
1,629,767 |
|
Cash |
|
|
|
|
|
|
|
|
|
|
|
362,969 |
|
|||
Total cash, cash equivalents and short-term investments |
|
|
|
|
|
|
|
|
|
|
$ |
1,992,736 |
|
|||
Financial Assets, Non-Current: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Convertible note receivable |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
5,460 |
|
|
$ |
5,460 |
|
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
We report our financial instruments at fair value, with the exception of the 2027 Notes and 2029 Notes (collectively, the "Notes"). Financial instruments that are not recorded at fair value on a recurring basis are measured at fair value on a quarterly basis for disclosure purposes. The carrying values and estimated fair values of financial instruments not recorded at fair value are as follows:
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As of July 31, 2024 |
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|
As of July 31, 2025 |
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Carrying |
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|
Estimated |
|
|
Carrying |
|
|
Estimated |
|
||||
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(in thousands) |
|
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2027 Notes |
|
$ |
570,073 |
|
|
$ |
631,178 |
|
|
$ |
497,059 |
|
|
$ |
695,295 |
|
2029 Notes |
|
|
— |
|
|
|
— |
|
|
|
846,759 |
|
|
|
976,652 |
|
Total |
|
$ |
570,073 |
|
|
$ |
631,178 |
|
|
$ |
1,343,818 |
|
|
$ |
1,671,947 |
|
The carrying value of the 2027 Notes as of July 31, 2024 and 2025 was net of unamortized debt issuance costs of $4.9 million and $2.9 million, respectively.
The carrying value of the 2029 Notes as of July 31, 2025 was net of unamortized debt issuance costs of $15.7 million.
The total estimated fair values of the Notes were determined based on the closing trading price per $100 of the Notes as of the last day of trading for the period. We consider the fair values of the Notes to be Level II valuations due to the limited trading activity.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Sep 24, 2025 | Showing above |
| 2024 | Sep 19, 2024 | |
| 2023 | Sep 21, 2023 | |
| 2022 | Sep 21, 2022 | |
| 2021 | Sep 21, 2021 | |
| 2020 | Sep 23, 2020 | |
| 2019 | Sep 24, 2019 | |
| 2018 | Sep 24, 2018 | |
| 2017 | Sep 18, 2017 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.