Cloud software vendor Nutanix reported that the Trump administration’s so-called Department of Government Efficiency (DOGE) hampered its ability to conduct business with the U.S. federal government.

In striking comments made during the vendor’s fourth-fiscal quarter earnings call, Nutanix CFO Rukmini Sivaraman said that personnel changes and additional reviews within the federal government resulted in “longer deal cycles and some increased variability.”

DOGE, which was set up by Elon Musk before his unceremonious departure from the Trump administration, was effectively a campaign that sought to slash government spending, with federal contracts and research projects ripped up alongside mass layoffs.

Sivaraman told investors that Nutanix has seen the federal government's efficiency push create unexpected friction in what was previously a reliable revenue stream.

“We don't report U.S. federal as a percent of our business, but we have said previously that over the last few fiscal years, [federal] has been … 10% or less of our annual revenue with seasonal strength in the fiscal Q1, which of course is [federal's] fiscal year end,” Sivaraman said.

The 10% figure Sivaraman disclosed represented roughly $250 million of the $2.54 billion in revenue Nutanix reported for fiscal 2025.

While DOGE appears to be in an indeterminate position following Musk’s departure, the CFO told investors that Nutanix has factored in all of this and some of the overall uncertainty into its Q1 and overall fiscal year 2026 guidance, projecting Q1 2026 revenue of up to $680 million – compared to Q4 2025 actual of $653 million.

Nutanix CEO Rajiv Ramaswami told The Register that DOGE has “100%” impacted federal procurement practices and subsequently made it far harder to pitch to the U.S. government.

With DOGE’s future uncertain, the CEO said, “it is starting to get a little more stable now,” touting that the vendor’s offerings could provide the efficiency gains desired by the so-called department’s overall mission.

Nutanix isn’t the only firm to have lost out due to DOGE.

IBM revealed earlier this year that it lost 15 federal contracts in Q1 2025 due to DOGE, which would have accounted for around $100 million in future payments.

In addition to vendor impacts, the department shut down 18F, the technology consulting unit of the General Services Administration (GSA), slashed jobs at the Department of Energy and the National Oceanic and Atmospheric Administration (NOAA), and claimed to have saved a million dollars per year by converting 14,000 magnetic tapes to “permanent modern digital records.”

DOGE is, however, a department in name only, as the creation of a federal executive department requires an act of Congress. Instead, it serves as an advisory body operating outside of government.

Musk departed DOGE in late May following a spat with the President over his "One Big Beautiful Bill." Many of its staffers remain sprinkled across various government agencies, with some of their advisory roles being converted to permanent, career positions – a move that leading Democrats are arguing constitutes "burrowing," where political appointees quietly become career civil servants.

The Democrats’ Trump administration ire also extends to the Department of Justice (DOJ) over its potential violation of judicial review of DOJ settlements following its green-lighting of Hewlett Packard Enterprise’s Juniper acquisition.

Strong earnings and customer wins offset federal headwinds

Sticking with Nuatanix, the firm reported a 19% year-over-year revenue rise for Q4, rising from $548 million to $653.3 million.

For the full fiscal year, Nuatanix saw revenues rise 18% to $2.54 billion, with free cash flow growing 26% year-over-year to $750 million – a free cash flow margin of 30%.

The vendor saw a slight uptick in customer contract length, rising to 3.2 years, with it continuing to snap up customers – some 2,700 new firms during FY25, its highest in four years.

Sivaraman told investors the vendor “continue[s] to see strength in landing new customers” with the new logos joining its growing base spanning various sizes and verticals – including more than 50 accounts found on Forbes’ Global 200 list.

Nuatanix has been a key player in snapping up disgruntled VMware customers following Broadcom’s acquisition, with its CFO revealing it anticipates more of the same in FY26.

“We expect to continue landing new customers onto our platform at a rate of approximately mid- to high-three digits of new logos a quarter in fiscal year 2026,” Sivaraman told investors.

The vendor has teamed up on storage deals with the likes of Pure Storage and Dell Technologies to further entice customers away from VMware.

Ramaswami told SDxCentral earlier this summer that almost every conversation he has with customers sees the topic of VMware come up, with customers on both sides of the Atlantic impacted.

“I see the same dynamic in Europe as well as North America,” the CEO said. "European customers are facing the same reality of who they are going to trust to be their long-term partner for running their mission-critical applications. They want to work with somebody who takes care of them, who continues to invest in innovation, and can be trusted long-term partner.”