Earnings release
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EXHIBIT 99.1 Nutanix Reports Fourth Quarter and Fiscal 2026 Financial Results Reports 16% YoY ARR Growth and Strong Free Cash Flow for Fiscal 2026 Delivers Outperformance Across All Fourth Quarter Guided Metrics SAN JOSE, Calif., Aug. 26, 2026 (GLOBE NEWSWIRE) -- Nutanix, Inc. (NASDAQ: NTNX), a hybrid cloud leader and AI innovator,today announced financial results for its fourth quarter and fiscal year ended July 31, 2026. “Our fourth quarter was a strong finish to fiscal 2026, a year in which we delivered solid top and bottom line performance and added over3,000 new customers,” said Rajiv Ramaswami, CEO of Nutanix. “In FY26, we made good progress with respect to partnerships, signingnew or enhanced agreements with AMD, Lenovo, NetApp and NVIDIA. We also delivered innovation across our cloud platform, especiallywith respect to AI and broadening our support for external storage.” “Our fiscal 2026 results demonstrated a good balance of top and bottom line performance with 16% year-over-year ARR growth and strongfree cash flow generation,” said Rukmini Sivaraman, CFO of Nutanix. “We remain focused on delivering sustainable growth and improvingprofitability.” Fourth Quarter Fiscal 2026 Financial Summary Q4 FY’26 Q4 FY’25 Y/Y Change Annual Recurring Revenue (ARR)1 $2.55 billion $2.20 billion 16% Average Contract Duration2 3.3 years 3.2 years 0.1 years Revenue $757.1 million$653.3 million 16%GAAP Gross Margin 86.0% 87.2% (120) bpsNon-GAAP Gross Margin 87.7% 88.3% (60) bpsGAAP Operating Expenses $581.4 million$538.2 million 8%Non-GAAP Operating Expenses $465.6 million$457.2 million 2%GAAP Operating Income $70.0 million $31.2 million $38.8 millionNon-GAAP Operating Income $198.0 million$119.5 million $78.5 millionGAAP Operating Margin 9.2% 4.8% 440 bpsNon-GAAP Operating Margin 26.2% 18.3% 790 bpsNet Cash Provided by Operating Activities $315.0 million$219.5 million$95.5 millionFree Cash Flow $277.6 million$207.8 million$69.8 million Fiscal 2026 Financial Summary FY’26 FY’25 Y/Y Change Annual Recurring Revenue (ARR)1 $2.55 billion $2.20 billion 16% Average Contract Duration2 3.2 years 3.1 years 0.1 years Revenue $2.85 billion $2.54 billion 12%GAAP Gross Margin 86.8% 86.8% 0 bpsNon-GAAP Gross Margin 88.0% 88.1% (10) bpsGAAP Operating Expenses $2.20 billion $2.03 billion 8%Non-GAAP Operating Expenses $1.84 billion $1.70 billion 8%GAAP Operating Income $274.0 million$172.5 million$101.5 millionNon-GAAP Operating Income $675.4 million$536.1 million$139.3 millionGAAP Operating Margin 9.6% 6.8% 280 bpsNon-GAAP Operating Margin 23.7% 21.1% 260 bpsNet Cash Provided by Operating Activities $916.7 million$821.5 million$95.2 millionFree Cash Flow $840.7 million$750.2 million$90.5 million Reconciliations between GAAP and non-GAAP financial measures and key performance measures, to the extent available, are provided inthe tables of this press release. Recent Company Highlights Nutanix Announces the Model Context Protocol (MCP) Server for Nutanix Cloud Platform (NCP): Nutanix announced the launch ofits MCP server for NCP, bringing secure, natural-language, agentic AI automation to hybrid cloud environments without sacrificingcontrol.Nutanix Announces Availability of Dell PowerStore: Nutanix announced that Dell Private Cloud with PowerStore for NCP is nowavailable with Nutanix Cloud Infrastructure (NCI) 7.6.
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Nutanix Unveils New Regulated Industry Data from Its Eighth Annual Enterprise Cloud Index (ECI) Survey: Nutanix unveiled newregulated industry data from its eighth annual ECI survey shared earlier this year, which showed that Healthcare, Financial Services,and Public Sector industries face the greatest risks in shadow AI, data sovereignty, compliance, and organizational silos.Nutanix and ChronoScale Announce Strategic Partnership to Accelerate Enterprise AI Adoption: Nutanix and ChronoScaleannounced a strategic partnership to jointly deliver enterprise-ready AI infrastructure and help accelerate adoption of AI serversacross global markets.Nutanix Gives Enterprises the Freedom to Run Production Agentic AI Their Way: Nutanix announced the general availability ofNutanix Enterprise AI (NAI) 2.8, and the upcoming general availability of Nutanix Kubernetes Platform (NKP) 2.19, along with newincentives, programs, and resources designed to help partners accelerate growth on emerging AI opportunities. First Quarter Fiscal 2027 Outlook Revenue $755 - $765 millionNon-GAAP Operating Margin 26% to 28% Weighted Average Shares Outstanding (Diluted)3 Approximately 294 million Fiscal 2027 Outlook Revenue $3.180 - $3.230 billionNon-GAAP Operating Margin 24% to 25%Free Cash Flow $850 - $950 million Supplementary materials to this press release, including our fourth quarter and fiscal 2026 earnings presentation, can be foundat https://ir.nutanix.com/financial/quarterly-results. Webcast and Conference Call Information Nutanix executives will discuss the Company’s fourth quarter and fiscal 2026 financial results on a conference call today at 4:30 p.m.Eastern Time / 1:30 p.m. Pacific Time. Interested parties may access the conference call by registering at this link to receive dial in detailsand a unique PIN number. The conference call will also be webcast live on the Nutanix Investor Relations website at ir.nutanix.com. Anarchived replay of the webcast will be available on the Nutanix Investor Relations website at ir.nutanix.com shortly after the call. Footnotes 1Annual Recurring Revenue, or ARR, is defined as the sum of ACV for all subscription contracts from all customers in effect as of the endof a specific period, assuming any subscription contract that expires is renewed on its existing terms. ARR excludes the value ofprofessional services, non-portable software and support contracts and hardware sales. For the purposes of this calculation, we generallyassume that the contract term begins on the date when the software is made available to the customer. ACV is defined as the totalannualized value of a contract. The total annualized value for a contract is calculated by dividing the total value of the contract by thenumber of years in the term of such contract. Beginning with the first quarter of fiscal 2026, our methodology for calculating ARR wasupdated to align more closely with the timing of when licenses are made available to customers. For comparability purposes, ARR for allprior periods have been adjusted to conform to the updated methodology. 2Average Contract Duration represents the dollar-weighted term, calculated on a billings basis, across all subscription contracts, as wellas our limited number of life-of-device contracts, using an assumed term of five years for life-of-device licenses, executed in the period. 3Weighted average share count used in computing diluted non-GAAP net income per share. Non-GAAP Financial Measures and Other Key Performance Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, this press releaseincludes the following non-GAAP financial and other key performance measures: non-GAAP gross margin, non-GAAP operating expenses,non-GAAP operating income, non-GAAP operating margin, free cash flow, Annual Recurring Revenue (or ARR), and Average ContractDuration. In computing non-GAAP financial measures, we exclude certain items such as stock-based compensation, costs associated withour acquisitions (such as amortization of acquired intangible assets and other acquisition-related costs), restructuring charges, litigationsettlement accruals and legal fees related to certain litigation matters, the amortization of the debt discount and issuance costs related todebt, interest expense related to debt, inducement expense related to the repurchase of convertible senior notes, changes in the fair value ofconvertible notes receivable, valuation allowance releases, and other non-recurring transactions and the related tax impact. Non-GAAPgross margin, non-GAAP operating expenses, non-GAAP operating income, and non-GAAP operating margin are financial measures whichwe believe provide useful information to investors because they provide meaningful supplemental information regarding our performanceand liquidity by excluding certain expenses and expenditures such as stock-based compensation expense that may not be indicative of ourongoing core business operating results. Free cash flow is a performance measure that we believe provides useful information to ourmanagement and investors about the amount of cash generated by the business after capital expenditures, and we define free cash flow asnet cash provided by operating activities less purchases of property and equipment. ARR is a performance measure that we believe providesuseful information to our management and investors as it allows us to better track the top-line growth of our subscription business
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(including our ability to acquire subscriptions with new customers and to retain and expand with existing customers), while normalizing fordifferences in contract durations. Our calculation of ARR is not adjusted for the impact of any known or projected future events (such ascustomer cancellations, expansion or contraction of existing customers relationships or price increases or decreases) that may cause anysubscription contract not to be renewed on its existing terms. ARR is a performance measure that should be viewed independently ofrevenue and does not represent our revenue under GAAP on an annualized basis or a forecast of GAAP revenue. Investors should not placeundue reliance on ARR as an indicator of our future or expected results. ARR does not have any standardized meaning and is thereforeunlikely to be comparable to similarly titled performance measures presented by other companies. We use these non-GAAP financial andkey performance measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons.However, these non-GAAP financial and key performance measures have limitations as analytical tools and you should not consider themin isolation or as substitutes for analysis of our results as reported under GAAP. Non-GAAP gross margin, non-GAAP operating expenses,non-GAAP operating income, non-GAAP operating margin, and free cash flow are not substitutes for gross margin, operating expenses,operating income, operating margin, and net cash provided by operating activities, respectively. There is no GAAP measure that iscomparable to ARR or Average Contract Duration, so we have not reconciled the ARR or Average Contract Duration data included in thispress release to any GAAP measure. In addition, other companies, including companies in our industry, may calculate non-GAAP financialmeasures and key performance measures differently or may use other measures to evaluate their performance, all of which could reduce theusefulness of our non-GAAP financial measures and key performance measures as tools for comparison. We urge you to review thereconciliation of our non-GAAP financial measures and key performance measures to the most directly comparable GAAP financialmeasures included below in the tables captioned “Reconciliation of GAAP to Non-GAAP Profit Measures” and “Reconciliation of GAAPNet Cash Provided By Operating Activities to Non-GAAP Free Cash Flow,” and not to rely on any single financial measure to evaluate ourbusiness. This press release also includes the following forward-looking non-GAAP financial measures as part of our first quarter fiscal2027 outlook and/or our fiscal 2027 outlook: non-GAAP operating margin and free cash flow. We are unable to reconcile these forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures without unreasonable efforts, as we arecurrently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact theGAAP financial measures for these periods but would not impact the non-GAAP financial measures. Forward-Looking Statements This press release contains express and implied forward-looking statements, including, but not limited to, statements regarding: ourbusiness trends, momentum and prospects; our expectations regarding demand for our solutions; our ability to capitalize on marketopportunities through our partnerships, cloud platform innovations, AI offerings and support for external storage; our focus on deliveringsustainable growth and improving profitability; our first quarter fiscal 2027 outlook; and our fiscal 2027 outlook. These forward-looking statements are not historical facts and instead are based on our current expectations, estimates, opinions, and beliefs.Consequently, you should not rely on these forward-looking statements. The accuracy of these forward-looking statements depends uponfuture events and involves risks, uncertainties, and other factors, including factors that may be beyond our control, that may cause thesestatements to be inaccurate and cause our actual results, performance or achievements to differ materially and adversely from thoseanticipated or implied by such statements, including, among others: the inherent uncertainty or assumptions and estimates underlying ourprojections and guidance, which are necessarily speculative in nature; supply chain constraints, component availability and related impactson the timing of orders, shipments and customer deployments; any failure to successfully implement or realize the anticipated benefits ofour business plans, strategies and initiatives, or unexpected difficulties or delays in doing so; our ability to achieve, sustain and/or managefuture growth effectively; the rapid evolution of the markets in which we compete, including the introduction, or acceleration of adoptionof, competing solutions, including public cloud infrastructure; failure to timely and successfully meet our customer needs; delays in or lackof customer or market acceptance of our new solutions (including AI-related offerings), products, services, product features or technology;macroeconomic or geopolitical uncertainty; our ability to attract, recruit, train, retain, and, where applicable, ramp to full productivity,qualified employees and key personnel; factors that could result in the significant fluctuation of our future quarterly operating results(including anticipated changes to our revenue and product mix, the timing and magnitude of orders, shipments and acceptance of oursolutions in any given quarter, our ability to attract new and retain existing end-customers, changes in the pricing and availability of certaincomponents of our solutions, and fluctuations in demand and competitive pricing pressures for our solutions); our ability to form new ormaintain and strengthen existing strategic alliances and partnerships, as well as our ability to manage any changes thereto; our ability tosuccessfully implement and realize the anticipated benefits of our recently announced restructuring initiatives; our ability to make sharerepurchases; and other risks detailed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2025 filed with the U.S.Securities and Exchange Commission, or the SEC, on September 24, 2025 and subsequent quarterly reports. Additional information will beset forth in our Annual Report on Form 10-K for the fiscal year ended July 31, 2026, which should be read in conjunction with this pressrelease and the financial results included herein. Our SEC filings are available on the Investor Relations section of our website atir.nutanix.com and on the SEC's website at www.sec.gov. These forward-looking statements speak only as of the date of this press releaseand, except as required by law, we assume no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any ofthese forward-looking statements to reflect actual results or subsequent events or circumstances. About Nutanix Nutanix is a hybrid cloud leader and AI innovator, offering organizations a unified infrastructure software platform to safely runapplications, data, and AI anywhere. Trusted by customers worldwide, Nutanix empowers more than 50% of the Global 2000 to innovatefaster with AI, while modernizing infrastructure, simplifying operations, and controlling costs. Learn more at www.nutanix.com or followus on social media. © 2026 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein areregistered trademarks or unregistered trademarks of Nutanix, Inc. (“Nutanix”) in the United States and other countries. Other brand namesor marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release isfor informational purposes only and nothing herein constitutes a warranty or other binding commitment by Nutanix. Investor Contact:Richard Valerair@nutanix.com
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Media Contact:Jennifer Massaropr@nutanix.com NUTANIX, INC.CONSOLIDATED BALANCE SHEETS(Unaudited) As of July 31,2025 July 31,2026 (in thousands) Assets Current assets: Cash and cash equivalents $ 769,502 $ 777,308 Short-term investments 1,223,234 1,584,155 Accounts receivable, net 337,967 289,251 Deferred commissions—current 153,072 156,316 Prepaid expenses and other current assets 105,391 221,483 Total current assets 2,589,166 3,028,513 Property and equipment, net 142,814 134,887 Operating lease right-of-use assets 134,526 164,427 Deferred commissions—non-current 189,221 217,606 Intangible assets, net 2,615 1,837 Goodwill 185,235 185,235 Deferred tax asset(1) 16,974 1,215,823 Other assets—non-current 22,643 125,357 Total assets $ 3,283,194 $ 5,073,685 Liabilities and Stockholders’ (Deficit) Equity Current liabilities: Accounts payable $ 81,599 $ 96,508 Accrued compensation and benefits 230,498 269,181 Accrued expenses and other current liabilities 24,187 36,117 Deferred revenue—current 1,054,023 1,246,575 Operating lease liabilities—current 23,234 35,713 Total current liabilities 1,413,541 1,684,094 Deferred revenue—non-current 1,058,731 1,176,794 Operating lease liabilities—non-current 115,754 134,310 Convertible senior notes, net 1,343,818 1,348,711 Other liabilities—non-current 45,870 27,211 Total liabilities 3,977,714 4,371,120 Stockholders’ (deficit) equity: Common stock 7 7 Additional paid-in capital 4,200,466 4,416,059 Accumulated other comprehensive income (loss) 700 (4,895)Accumulated deficit (4,895,693) (3,708,606) Total stockholders’ (deficit) equity (694,520) 702,565 Total liabilities and stockholders’ (deficit) equity $ 3,283,194 $ 5,073,685 __________________________(1) Prior to the fourth quarter of fiscal 2026, this was included within Other assets—non-current. Prior period amounts have been updatedto conform to the current period presentation. NUTANIX, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) Three Months EndedJuly 31, Fiscal Year EndedJuly 31, 2025 2026 2025 2026 (in thousands, except per share data) Revenue:
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Product $ 339,789 $ 388,388 $ 1,341,374 $ 1,489,693 Support, maintenance and other services 313,478 368,690 1,196,553 1,363,852 Total revenue 653,267 757,078 2,537,927 2,853,545 Cost of revenue: Product(1)(2) 4,372 5,661 28,341 21,443 Support, maintenance and other services(1) 79,461 100,066 306,441 355,306 Total cost of revenue 83,833 105,727 334,782 376,749 Gross profit 569,434 651,351 2,203,145 2,476,796 Operating expenses: Sales and marketing(1)(2) 281,280 303,897 1,056,465 1,150,278 Research and development(1) 193,666 205,053 736,823 790,892 General and administrative(1) 63,280 72,412 237,316 261,656 Total operating expenses 538,226 581,362 2,030,604 2,202,826 Income from operations 31,208 69,989 172,541 273,970 Other income, net 13,935 12,726 39,107 53,138 Income before provision for (benefit from) income taxes 45,143 82,715 211,648 327,108 Provision for (benefit from) income taxes 6,493 (1,186,917) 23,282 (1,179,729)Net income $ 38,650 $ 1,269,632 $ 188,366 $ 1,506,837 Net income per share attributable to Class A commonstockholders, basic $ 0.14 $ 4.69 $ 0.70 $ 5.61 Net income per share attributable to Class A commonstockholders, diluted $ 0.13 $ 4.34 $ 0.65 $ 5.17 Weighted average shares used in computing net incomeper share attributable to Class A common stockholders,basic 268,659 270,570 267,479 268,691 Weighted average shares used in computing net incomeper share attributable to Class A common stockholders,diluted 297,456 292,736 294,083 292,183 __________________________(1) Includes the following stock-based compensation expense: Three Months EndedJuly 31, Fiscal Year EndedJuly 31, 2025 2026 2025 2026 (in thousands) Product cost of revenue $ 399 $ 400 $ 2,824 $ 1,550 Support, maintenance and other services cost of revenue 6,814 8,058 27,582 28,190 Sales and marketing 19,372 22,332 80,930 82,402 Research and development 42,872 45,481 175,361 180,844 General and administrative 15,714 18,254 64,893 64,681 Total stock-based compensation expense$ 85,171 $ 94,525 $ 351,590 $ 357,667 __________________________(2) Includes the following amortization of intangible assets: Three Months EndedJuly 31, Fiscal Year EndedJuly 31, 2025 2026 2025 2026 (in thousands) Product cost of revenue $ 105 $ 106 $ 2,185 $ 424 Sales and marketing 88 90 353 354 Total amortization of intangible assets$ 193 $ 196 $ 2,538 $ 778 NUTANIX, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Fiscal Year EndedJuly 31, 2025 2026 (in thousands)
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Cash flows from operating activities: Net income $ 188,366 $ 1,506,837 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 72,701 70,640 Stock-based compensation 351,590 357,667 Amortization of debt discount and issuance costs 3,877 5,452 Inducement expense from partial repurchase of the 2027 Notes 11,347 — Operating lease cost, net of accretion 29,029 34,946 Deferred income taxes 3,639 (1,198,850)Other (8,468) (4,792)Changes in operating assets and liabilities: Accounts receivable, net (71,886) (39,170)Deferred commissions 16,517 (31,630)Prepaid expenses and other assets (8,101) (130,217)Accounts payable 30,018 19,443 Accrued compensation and benefits 33,286 44,492 Accrued expenses and other liabilities (4,269) 709 Operating leases, net (29,954) (33,813)Deferred revenue 203,764 314,974 Net cash provided by operating activities 821,456 916,688 Cash flows from investing activities: Maturities of investments 476,173 805,208 Purchases of investments (1,359,593) (1,167,799)Sales of investments 3,016 2,750 Purchases of property and equipment (71,283) (76,013)Net cash used in investing activities (951,687) (435,854)Cash flows from financing activities: Proceeds from sales of shares through employee equity incentive plans 68,935 61,447 Proceeds from sales of shares through private placement — 150,000 Taxes paid related to net share settlement of equity awards (256,636) (195,534)Proceeds from the issuance of convertible notes, net of issuance costs 848,010 — Payment of third-party debt issuance costs (3,448) — Partial repurchase of the 2027 Notes (95,453) — Payment of revolver issuance costs (2,794) — Repurchases of common stock (307,900) (483,543)Other financing activities, net (6,628) (5,399)Net cash provided by (used in) financing activities 244,086 (473,029)Net increase in cash, cash equivalents and restricted cash$ 113,855 $ 7,805 Cash, cash equivalents and restricted cash—beginning of period 655,662 769,517 Cash, cash equivalents and restricted cash—end of period$ 769,517 $ 777,322 Restricted cash(1) 15 14 Cash and cash equivalents—end of period $ 769,502 $ 777,308 Supplemental disclosures of cash flow information: Cash paid for income taxes $ 32,537 $ 30,274 Supplemental disclosures of non-cash investing andfinancing information: Purchases of property and equipment included in accounts payable andaccrued and other liabilities $ 6,945 $ 2,412 Unpaid taxes related to net share settlement of equity awards includedin accrued expenses and other liabilities $ 13,423 $ 7,615 __________________________(1) Included within other assets—non-current in the consolidated balance sheets. Disaggregation of Revenue(Unaudited) Three Months EndedJuly 31, Fiscal Year EndedJuly 31, 2025 2026 2025 2026 (in thousands) Disaggregation of revenue:
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Subscription revenue $ 615,974 $ 719,111 $ 2,410,751 $ 2,712,274 Professional services and other revenue(1) 37,293 37,967 127,176 141,271 Total revenue $ 653,267 $ 757,078 $ 2,537,927 $ 2,853,545 __________________________(1) Prior to fiscal 2026, these amounts were presented as separate line items, Professional services and Other non-subscription product.Prior period amounts have been updated to conform to the current period presentation. Annual Recurring Revenue(Unaudited) As of July 31, 2025 2026 (in thousands) Annual Recurring Revenue (ARR) (1) $ 2,201,672 $ 2,548,797 __________________________ (1) Beginning with the first quarter of fiscal 2026, our methodology for calculating ARR was updated to align more closely with the timingof when licenses are made available to customers. Prior period amounts have been updated to conform to current quarter methodology. Remaining Performance Obligations(Unaudited) As of July 31, 2025 2026 (in thousands) Remaining performance obligations: Current $ 1,328,328 $ 1,686,685 13-36 months 977,341 1,293,675 Thereafter 386,892 460,051 Total $ 2,692,561 $ 3,440,411 Reconciliation of GAAP to Non-GAAP Profit Measures(Unaudited) GAAP Non-GAAP Adjustments Non-GAAP ThreeMonthsEndedJuly 31,2026 (1) (2) (3) (4) (5) (6) (7) (8) ThreeMonthsEndedJuly 31,2026 (in thousands, except percentages and per share data) Gross profit$ 651,351 $ 8,458 $106 $ 3,706 $ — $ — $ — $ — $ — $663,621 Gross margin 86.0% 1.2% — 0.5% — — — — — 87.7%Operatingexpenses: Sales andmarketing 303,897 (22,332) (90) (17,597) — — — — — 263,878 Research anddevelopment 205,053 (45,481) — (5,173) — — — — — 154,399 General andadministrative 72,412 (18,254) — (1,162) (5,248) (408) — — — 47,340 Total operatingexpenses 581,362 (86,067) (90) (23,932) (5,248) (408) — — — 465,617 Income fromoperations 69,989 94,525 196 27,638 5,248 408 — — — 198,004 Operating margin 9.2% 12.5% — 3.7% 0.7% 0.1% — — — 26.2%
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Net income $1,269,632 $94,525 $196 $27,638 $5,248 $5,868 $3,001 $(1,208,216) $(22,539) $175,353 Weighted sharesoutstanding, basic 270,570 270,570 Weighted sharesoutstanding, diluted (9) 292,736 292,736 Net income pershare, basic $ 4.69 $ 0.36 $ - $ 0.10 $ 0.02 $ 0.02 $ 0.01 $ (4.47) $ (0.08) $ 0.65 Net income per share, diluted (10) $ 4.34 $ 0.60 __________________________(1) Stock-based compensation expense(2) Amortization of intangible assets(3) Restructuring charges(4) Legal fees(5) Change in fair value of convertible note receivable and other(6) Amortization of debt issuance costs and interest expense related to debt(7) Valuation allowance release related to our U.S. deferred tax assets(8) Income tax effect of non-GAAP adjustments. We use a long-term projected non-GAAP tax rate of 20% for the purposes of determiningour non-GAAP net income and non-GAAP income per share, which is based on our current long-term projections. We believe the use of along-term projected tax rate of 20% aligns with the non-GAAP measure of profitability, reduces volatility of the non-GAAP tax rate andprovides consistency across reporting periods. Our estimated long-term projected tax rate is subject to change for a variety of reasons,including tax law changes in major jurisdictions in which we operate, changes in our geographic earnings mix, or other changes to ourstrategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate.(9) Includes 22,166 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equityincentive plans(10) In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back$1,099 of interest expense related to the convertible senior notes GAAP Non-GAAP Adjustments Non-GAAP FiscalYearEndedJuly 31,2026 (1) (2) (3) (4) (5) (6) (7) (8) FiscalYearEndedJuly 31,2026 (in thousands, except percentages and per share data) Gross profit$2,476,796 $ 29,740 $424 $ 3,706 $ — $ — $ — $ — $ — $2,510,666 Gross margin 86.8% 1.1% — 0.1% — — — — — 88.0%Operatingexpenses: Sales andmarketing 1,150,278 (82,402) (354) (17,597) — — — — — 1,049,925 Research anddevelopment 790,892 (180,844) — (5,173) — — — — — 604,875 General andadministrative 261,656 (64,681) — (1,162) (14,899) (408) — — — 180,506 Total operatingexpenses 2,202,826 (327,927) (354) (23,932) (14,899) (408) — — — 1,835,306 Income fromoperations 273,970 357,667 778 27,638 14,899 408 — — — 675,360 Operatingmargin 9.6% 12.6% — 1.0% 0.5% — — — — 23.7%Net income$1,506,837 $357,667 $778 $27,638 $14,899 $5,868 $11,986 $(1,208,216) $(120,702) $ 596,755 Weighted sharesoutstanding,basic 268,691 268,691 Weighted sharesoutstanding, diluted(9) 292,183 292,183 Net income pershare, basic$ 5.61 $ 1.34 $ - $ 0.10 $ 0.06 $ 0.02 $ 0.04 $ (4.50) $ (0.45) $ 2.22 Net income pershare, diluted(10) $ 5.17 $ 2.04
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__________________________(1) Stock-based compensation expense(2) Amortization of intangible assets(3) Restructuring charges(4) Legal fees(5) Change in fair value of convertible note receivable and other(6) Amortization of debt issuance costs and interest expense related to debt(7) Valuation allowance release related to our U.S. deferred tax assets(8) Income tax effect of non-GAAP adjustments. We use a long-term projected non-GAAP tax rate of 20% for the purposes of determiningour non-GAAP net income and non-GAAP income per share, which is based on our current long-term projections. We believe the use of along-term projected tax rate of 20% aligns with the non-GAAP measure of profitability, reduces volatility of the non-GAAP tax rate andprovides consistency across reporting periods. Our estimated long-term projected tax rate is subject to change for a variety of reasons,including tax law changes in major jurisdictions in which we operate, changes in our geographic earnings mix, or other changes to ourstrategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate.(9) Includes 23,492 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equityincentive plans(10) In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back$4,403 of interest expense related to the convertible senior notes GAAP Non-GAAP Adjustments Non-GAAP ThreeMonthsEndedJuly 31,2025 (1) (2) (3) (4) (5) (6) ThreeMonthsEndedJuly 31,2025 (in thousands, except percentages and per share data) Gross profit $569,434 $ 7,213 $ 105 $ — $ — $ — $ — $576,752 Gross margin 87.2% 1.1% — — — — — 88.3%Operating expenses: Sales and marketing 281,280 (19,372) (88) — — — — 261,820 Research and development 193,666 (42,872) — — — — — 150,794 General and administrative 63,280 (15,714) — (2,971) — — — 44,595 Total operating expenses 538,226 (77,958) (88) (2,971) — — — 457,209 Income from operations 31,208 85,171 193 2,971 — — — 119,543 Operating margin 4.8% 13.0% — 0.5% — — — 18.3%Net income $ 38,650 $85,171 $ 193 $ 2,971 $ (100) $ 3,008 $(20,784) $109,109 Weighted shares outstanding, basic 268,659 268,659 Weighted shares outstanding, diluted(7) 297,456 297,456 Net income per share, basic$ 0.14 $ 0.33 $ - $ 0.01 $ - $ 0.01 $ (0.08) $ 0.41 Net income per share, diluted(8) $ 0.13 $ 0.37 __________________________(1) Stock-based compensation expense(2) Amortization of intangible assets(3) Legal fees(4) Other(5) Amortization of debt issuance costs and interest expense related to debt(6) Income tax effect of non-GAAP adjustments. We use a long-term projected non-GAAP tax rate of 20% for the purposes of determiningour non-GAAP net income and non-GAAP income per share, which is based on our current long-term projections. We believe the use of along-term projected tax rate of 20% aligns with the non-GAAP measure of profitability, reduces volatility of the non-GAAP tax rate andprovides consistency across reporting periods. Our estimated long-term projected tax rate is subject to change for a variety of reasons,including tax law changes in major jurisdictions in which we operate, changes in our geographic earnings mix, or other changes to ourstrategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate.(7) Includes 28,797 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equityincentive plans(8) In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back$1,099 of interest expense related to the convertible senior notes GAAP Non-GAAP Adjustments Non-GAAP FiscalYearEndedJuly 31,2025 (1) (2) (3) (4) (5) (6) (7) FiscalYearEndedJuly 31,2025
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(in thousands, except percentages and per share data) Gross profit $2,203,145 $ 30,406 $2,185 $ — $ — $ — $ — $ — $2,235,736 Gross margin 86.8% 1.2% 0.1% — — — — — 88.1%Operating expenses: Sales and marketing 1,056,465 (80,930) (353) — — — — — 975,182 Research and development 736,823 (175,361) — — — — — — 561,462 General andadministrative 237,316 (64,893) — (9,451) — — — — 162,972 Total operating expenses 2,030,604 (321,184) (353) (9,451) — — — — 1,699,616 Income from operations 172,541 351,590 2,538 9,451 — — — — 536,120 Operating margin 6.8% 13.8% 0.1% 0.4% — — — — 21.1%Net income $ 188,366 $351,590 $2,538 $ 9,451 $ (310) $11,347 $8,377 $(95,646) $ 475,713 Weighted sharesoutstanding, basic 267,479 267,479 Weighted shares outstanding, diluted(8) 294,083 294,083 Net income per share, basic$ 0.70 $ 1.32 $ 0.01 $ 0.04 $ - $ 0.04 $ 0.03 $ (0.36) $ 1.78 Net income per share, diluted(9) $ 0.65 $ 1.62 __________________________(1) Stock-based compensation expense(2) Amortization of intangible assets(3) Legal fees(4) Other(5) Inducement expense related to partial repurchase of the 2027 Notes(6) Amortization of debt issuance costs and interest expense related to debt(7) Income tax effect of non-GAAP adjustments. We use a long-term projected non-GAAP tax rate of 20% for the purposes of determiningour non-GAAP net income and non-GAAP income per share, which is based on our current long-term projections. We believe the use of along-term projected tax rate of 20% aligns with the non-GAAP measure of profitability, reduces volatility of the non-GAAP tax rate andprovides consistency across reporting periods. Our estimated long-term projected tax rate is subject to change for a variety of reasons,including tax law changes in major jurisdictions in which we operate, changes in our geographic earnings mix, or other changes to ourstrategy or business operations. We will re-evaluate our long-term projected tax rate as appropriate.(8) Includes 26,604 potentially dilutive shares related to convertible senior notes and the issuance of shares under employee equityincentive plans(9) In accordance with ASC 260, in order to calculate GAAP net income per share, diluted, the numerator has been adjusted to add back$3,172 of interest expense related to the convertible senior notes Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow(Unaudited) Three Months EndedJuly 31, Fiscal Year EndedJuly 31, 2025 2026 2025 2026 (in thousands) Net cash provided by operating activities$ 219,529 $ 315,013 $ 821,456 $ 916,688 Purchases of property and equipment (11,750) (37,443) (71,283) (76,013)Free cash flow $ 207,779 $ 277,570 $ 750,173 $ 840,675