diff --git a/.release-please-manifest.json b/.release-please-manifest.json
index 5938ddac0..57953081c 100644
--- a/.release-please-manifest.json
+++ b/.release-please-manifest.json
@@ -1,3 +1,3 @@
 {
-  ".": "0.41.3"
+  ".": "0.42.0"
 }
diff --git a/CHANGELOG.md b/CHANGELOG.md
index d3b38d367..9fd80e325 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,23 @@
 # Changelog
 
+## 0.42.0 (2026-01-08)
+
+<!-- Release notes generated using configuration in .github/release.yaml at main -->
+
+## What's Changed
+### Exciting New Features 🎉
+* feat: Enable multus installation for Nutanix infra by @kshitij-kumar-ngt in https://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix/pull/1445
+* feat: bump cosi to `v0.2.2` by @takirala in https://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix/pull/1449
+### Fixes 🔧
+* fix: update CoreDNS mapping file by @dkoshkin in https://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix/pull/1447
+* fix: Copy ClusterClass and Templates only if they do not already exist by @dlipovetsky in https://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix/pull/1386
+
+## New Contributors
+* @kshitij-kumar-ngt made their first contribution in https://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix/pull/1445
+* @takirala made their first contribution in https://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix/pull/1449
+
+**Full Changelog**: https://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix/compare/v0.41.3...v0.42.0
+
 ## 0.41.3 (2025-12-15)
 
 <!-- Release notes generated using configuration in .github/release.yaml at main -->
diff --git a/docs/hugo.toml b/docs/hugo.toml
index c809398c2..6be81f4f7 100644
--- a/docs/hugo.toml
+++ b/docs/hugo.toml
@@ -71,7 +71,7 @@ archived_version = false
 # The version number for the version of the docs represented in this doc set.
 # Used in the "version-banner" partial to display a version number for the
 # current doc set.
-version = "0.41.3"
+version = "0.42.0"
 
 # A link to latest version of the docs. Used in the "version-banner" partial to
 # point people to the main doc site.
diff --git a/test/e2e/config/caren.yaml b/test/e2e/config/caren.yaml
index 77c3abfe2..e1b707f46 100644
--- a/test/e2e/config/caren.yaml
+++ b/test/e2e/config/caren.yaml
@@ -140,8 +140,8 @@ providers:
   versions:
   # Upgrade e2e tests will use this as the "upgrade from" version.
   # This should reference the most recent successful release.
-  - name: "{go://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix@v0.40}"
-    value: "https://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix/releases/download/{go://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix@v0.40}/runtime-extensions-components.yaml"
+  - name: "{go://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix@v0.41}"
+    value: "https://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix/releases/download/{go://github.com/nutanix-cloud-native/cluster-api-runtime-extensions-nutanix@v0.41}/runtime-extensions-components.yaml"
     type: "url"
     contract: v1beta1
     files:
@@ -151,7 +151,7 @@ providers:
       new: "--v=8"
     - old: --metrics-addr=127.0.0.1:8080
       new: --metrics-addr=:8080
-  - name: v0.42.99 # "vNext"; use manifests from local source files
+  - name: v0.43.99 # "vNext"; use manifests from local source files
     value: "file://../../../runtime-extensions-components.yaml"
     type: "url"
     contract: v1beta1
diff --git a/test/e2e/data/shared/v1beta1-caren/metadata.yaml b/test/e2e/data/shared/v1beta1-caren/metadata.yaml
index 06b6aee92..8254cfd32 100644
--- a/test/e2e/data/shared/v1beta1-caren/metadata.yaml
+++ b/test/e2e/data/shared/v1beta1-caren/metadata.yaml
@@ -115,3 +115,6 @@ releaseSeries:
   - contract: v1beta1
     major: 0
     minor: 42
+  - contract: v1beta1
+    major: 0
+    minor: 43