Hyperconverged cloud infrastructure company Nutanix Inc. delivered a mostly upbeat earnings report today, easily beating estimates on profit and revenue, and investors liked the news as the company’s stock gained more than 5% after-hours.

Nutanix reported fiscal third-quarter earnings before certain costs such as stock compensation of 47 cents per share, blowing past Wall Street’s target of 35 cents per share. Revenue for the quarter came to $703 million, up 10% from the same period one year ago and well ahead of the $686.4 million analyst estimate.

Disappointingly, though, Nutanix’s bottom line slipped, with net income coming to $63.4 million at the end of the quarter, down from $72.1 million a year earlier.

Chief Executive Rajiv Ramaswami (pictured) highlighted “solid demand” during the quarter, which resulted in especially strong bookings and good free cash flow performance. “We also announced significant new innovations and partnerships in the areas of AI, modern applications and support for external storage, which will help us pursue the substantial market opportunity in front of us,” he said.

Nutanix is a cloud computing company that’s known for pioneering the concept of hyperconverged infrastructure in data center environments. Its HCI platform merges compute, storage and networking into a single, software-defined system that makes it easier for enterprises to build flexible, “one-click” private and hybrid cloud computing environments.

With the rise of artificial intelligence, Nutanix is trying to capitalize on the opportunity to build the foundational infrastructure for AI agents, which can perform tasks autonomously on behalf of human workers. It’s trying to convince enterprises to move away from piecemeal platforms and build their AI agents on an integrated platform, where data, models and operations are all tightly connected. The goal is to make AI a production capability rather than an experiment.

In April, the company hosted its annual customer conference Nutanix .NEXT, where it emphasized how it’s aligning cloud-native architectures, Kubernetes and hybrid environments into a unified approach that reflects how enterprises actually deploy and manage AI workloads today.

During the event, Ramaswami appeared on theCUBE, SiliconANGLE Media’s livestreaming studio, where he discussed his company’s efforts to help enterprises operationalize AI. “It’s all about AI influencing agentic AI where you now move from simple inferencing to being able to really have agents delegate stuff to agents and have more autonomy and enable more autonomy in the enterprise,” he said. “That world is our future as well, because we are now moving to this new world of providing a complete platform to enable organizations, companies to be able to go build and run these agentic AI applications in a very easy turnkey way and also focused on building an ecosystem to support all of that.”

Here’s Ramaswami’s full interview:

Nutanix has a solid plan, but the transition is likely going to take some time, for its current-quarter guidance was a tad disappointing. The company said it’s looking for fourth-quarter revenue of between $725 million to $745 million, with the midpoint of that range well below the Street’s $742 million consensus estimate.

However, its full-year forecast was better. The company believes it will reach sales of $2.82 billion to $2.84 billion, ahead of the $2.82 billion analyst forecast.

The lower forecast is mostly a result of factors that Nutanix cannot easily control, Ramaswami told analysts on a conference call. For instance, it has to deal with higher component prices and longer lead times from its hardware partners, which are putting pressure on its deployment schedules. These supply dynamics are likely to persist into fiscal 2027, and will delay the conversion of some bookings into recognized revenue.

The company has also seen weaker sales in the Middle East, and doesn’t expect the picture there to improve in the current quarter.

Still, there were plenty of encouraging numbers from Nutanix’s report. Annual recurring revenue increased by 15% from a year earlier, to $2.435 billion, reflecting the durability of its subscription-based model, Ramaswami said. The company also saw robust bookings, with its total contract value growing more than 20% from a year earlier. Furthermore, it boosted its total customer count by more than 700 during the quarter, seeing notable traction in areas such as healthcare, financial services and aerospace and defense.

Despite the after-hours bump, Nutanix has yet to enjoy the same kind of boost from AI that has lifted chipmakers and public cloud infrastructure suppliers such as Amazon Web Services Inc. and Google LLC. Its stock is still down 9% in the year to date, compared with a 10% gain by the broader S&P 500 index.

Photo: SiliconANGLE