NOTE 2. REVENUE, DEFERRED REVENUE AND DEFERRED COMMISSIONS

Disaggregation of Revenue and Revenue Recognition

The Nutanix Cloud Platform can be deployed in core data centers, at the edge, or in public clouds, running on a variety of qualified hardware platforms (including out Nutanix-branded NX hardware line), in popular public cloud environments such as Amazon Web Services and Microsoft Azure through Nutanix Cloud Clusters, or, in the case of our cloud-based software and software-as-a-service ("SaaS") offerings, via hosted service. Our subscription term-based licenses are sold separately, or can also be sold alongside configured-to-order servers. Our subscription term-based licenses typically have durations ranging from one to five years. Our cloud-based SaaS subscriptions generally have durations extending up to five years.

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

 

 

 

Fiscal Year Ended July 31,

 

 

 

2023

 

 

2024

 

 

2025

 

 

 

(in thousands)

 

Subscription

 

$

1,730,848

 

 

$

2,016,776

 

 

$

2,410,751

 

Professional services

 

 

91,841

 

 

 

100,852

 

 

 

112,202

 

Other non-subscription product

 

 

40,206

 

 

 

31,188

 

 

 

14,974

 

Total revenue

 

$

1,862,895

 

 

$

2,148,816

 

 

$

2,537,927

 

Subscription revenue Subscription revenue includes any performance obligation which has a defined duration and is generated from the sales of software entitlement subscriptions, support subscriptions, subscription software licenses and cloud-based SaaS offerings.

Ratable We recognize revenue from software entitlement subscriptions, support subscriptions and SaaS offerings ratably over the contractual service period, the substantial majority of which relate to software entitlement subscriptions and support subscriptions. These offerings represented approximately $905.8 million, $1,029.0 million and $1,138.4 million of our subscription revenue for fiscal 2023, 2024 and 2025, 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 $825.0 million, $987.8 million and $1,272.4 million of our subscription revenue for fiscal 2023, 2024 and 2025, respectively.

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

Other non-subscription product revenueOther non-subscription product revenue includes approximately $37.4 million, $27.9 million and $10.8 million of non-portable software revenue for fiscal 2023, 2024 and 2025, respectively, and approximately $2.8 million, $3.3 million and $4.2 million of hardware revenue for fiscal 2023, 2024 and 2025, respectively.

Non-portable software revenue — Non-portable software revenue includes sales of our platform when delivered on a configured-to-order server by us or one of our OEM partners. The software licenses associated with these sales are typically non-portable and can be used over the life of the server 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 the infrequent transactions where the hardware platform 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.

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

 

 

 

Deferred
Revenue

 

 

Deferred
Commissions

 

 

 

(in thousands)

 

Balance as of July 31, 2023

 

$

1,595,032

 

 

$

357,991

 

Additions (1)

 

 

2,426,490

 

 

 

218,876

 

Revenue/commissions recognized

 

 

(2,148,816

)

 

 

(218,056

)

Balance as of July 31, 2024

 

 

1,872,706

 

 

 

358,811

 

Additions (1)

 

 

2,777,975

 

 

 

228,378

 

Revenue/commissions recognized

 

 

(2,537,927

)

 

 

(244,896

)

Balance as of July 31, 2025

 

$

2,112,754

 

 

$

342,293

 

 

(1)
Includes both billed and unbilled amounts.

During the fiscal year ended July 31, 2024, we recognized revenue of approximately $771.2 million pertaining to amounts deferred as of July 31, 2023. During the fiscal year ended July 31, 2025, we recognized revenue of approximately $863.1 million pertaining to amounts deferred as of July 31, 2024.

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 $2,692.6 million as of July 31, 2025, of which we expect to recognize approximately 49% within 12 months, approximately 36% over the subsequent 13- to 36-month period, and the remainder thereafter.

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Historical Timeline

Fiscal YearFiled
2025Sep 24, 2025Showing above
2024Sep 19, 2024
2023Sep 21, 2023
2022Sep 21, 2022
2021Sep 21, 2021
2020Sep 23, 2020
2019Sep 24, 2019
2018Sep 24, 2018

About Revenue Disclosures

Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.

Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.