Shares of Nutanix Inc. (NTNX) plummeted 5.03% in after-hours trading on Wednesday, despite the company reporting better-than-expected fourth-quarter results. The sharp decline came as investors focused on the company's guidance for fiscal 2026, which failed to meet market expectations.

For the fourth quarter ended July 31, 2025, Nutanix posted non-GAAP earnings of $0.37 per share, surpassing the analyst consensus estimate of $0.33. Revenue for the quarter rose 19% year-over-year to $653.3 million, also beating analysts' expectations of $642.5 million. The company's annual recurring revenue (ARR) grew 17% to $2.22 billion, slightly missing Wall Street projections of $2.241 billion.

However, the company's outlook for fiscal 2026 appears to have disappointed investors. Nutanix projected revenue between $2.90 billion and $2.94 billion for the full year, representing a growth rate of about 15% at the midpoint. This marks a slowdown from the 18% growth achieved in fiscal 2025. Additionally, the company expects a slight year-over-year decline in average contract duration, which could impact revenue growth.

The sell-off suggests that investors may be concerned about Nutanix's growth trajectory and the potential impact of macroeconomic uncertainties. While the company continues to show revenue growth and improved profitability, the slower growth rate implied by the guidance may have dampened enthusiasm among growth-oriented investors who were hoping for more aggressive projections.