Shares of Nutanix Inc. (NTNX) tumbled 5.26% in pre-market trading on Thursday, following the company's fourth-quarter earnings report and fiscal 2026 guidance released after market close on Wednesday. Despite beating expectations for the quarter, investors appeared to focus on the company's slower growth outlook for the coming year.

Nutanix reported strong fourth-quarter results, with revenue rising 19% year-over-year to $653.3 million, surpassing analyst estimates of $642.5 million. Non-GAAP earnings per share came in at $0.37, also beating the consensus forecast of $0.33. However, the company's annual recurring revenue (ARR) of $2.22 billion, while up 17% year-over-year, slightly missed Wall Street projections of $2.241 billion.

The primary driver behind the stock's decline appears to be Nutanix's fiscal 2026 guidance, which disappointed investors expecting more robust growth. The company projected full-year revenue between $2.90 billion and $2.94 billion, implying a growth rate of about 15% at the midpoint. This marks a deceleration from the 18% growth achieved in fiscal 2025. Additionally, Nutanix expects a slight year-over-year decline in average contract duration, which could further impact revenue growth. The company also noted continued uncertainty in the macro environment, particularly in areas such as US federal government spending, which may be contributing to the cautious outlook.