NetApp, Inc. (NTAP): Results of Operations and Financial Condition
NetApp, Inc. (NTAP) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 NetApp Reports First Quarter of Fiscal Year 2027 Results Delivers record quarterly net revenues of $2.03 billion, an increase of 30% year-over-year; First quarter GAAP earnings per share of $1.88; record non-GAAP earnings per share of $2.58; Significantly raised fisc
How this was made
The 30-second read
Why it matters
The earnings beat and raised guidance are likely to drive buying interest and lift the stock.
Market read
First‑report earnings with material numbers for a large-cap tech stock; high trading relevance.
What to watch
Potential execution risk on the DataPelago integration and macro‑economic headwinds could temper growth.
Record quarterly net revenues of $2.03 billion, an increase of 30% year-over-year; First quarter GAAP earnings per share of $1.88; record non-GAAP earnings per share of $2.58; Significantly raised fiscal year 2027 revenue and earnings per share guidance
Net revenues, billings, GAAP net income, non-GAAP net income, and both GAAP and non-GAAP diluted earnings per share increased year-over-year. The company issued second-quarter and full-year fiscal 2027 guidance, while operating cash flow and free cash flow declined year-over-year.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenuesGAAP | $ 2,025 | – | 30 % |
| Billingsnon-GAAP | $ 2,057 | – | 36 % |
| Gross profitGAAP | $ 1,419 | – | 29 % |
| Gross profitnon-GAAP | $ 1,429 | – | 29 % |
| Gross marginGAAP | 70.1 % | – | – |
| Gross marginnon-GAAP | 70.6 % | – | – |
| Income from operationsGAAP | $ 484 | – | – |
| Operating marginGAAP | 23.9 % | – | – |
| Income from operationsnon-GAAP | $ 645 | – | – |
| Operating marginnon-GAAP | 31.9 % | – | – |
| Net incomeGAAP | $ 375 | – | 61 % |
| Net incomenon-GAAP | $ 515 | – | 64 % |
| Net income per share, basicGAAP | $ 1.91 | – | – |
| Net income per share, dilutedGAAP | $ 1.88 | – | 63 % |
| Net income per share, dilutednon-GAAP | $ 2.58 | – | 66 % |
| Effective tax rateGAAP | 22.5 % | – | – |
| Effective tax ratenon-GAAP | 20.2 % | – | – |
| Net cash provided by operating activitiesGAAP | $ 503 | – | (25 )% |
| Free cash flownon-GAAP | $ 401 | – | (35 )% |
| Free cash flow marginnon-GAAP | 19.8 % | – | – |
| Sales and marketing expensesGAAP | $ 507 | – | – |
| Research and development expensesGAAP | $ 274 | – | – |
| General and administrative expensesGAAP | $ 98 | – | – |
| Restructuring chargesGAAP | $ 56 | – | – |
| Total operating expensesGAAP | $ 935 | – | – |
| Total operating expensesnon-GAAP | $ 784 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Hybrid Cloud segment revenuesProduct revenue was $ 987, support revenue was $ 720, and professional and other services revenue was $ 112. | $ 1,819 | – | 30 % |
| Public Cloud segment revenuesPublic Cloud segment gross profit was $ 178 and Public Cloud segment gross margin was 86.4 %. | $ 206 | – | 28 % |
| All-flash revenuesReported as a Hybrid Cloud segment storage category. | $ 1,309 | – | 47% |
| Hybrid-flash and other revenuesReported as a Hybrid Cloud segment storage category. | 510 | – | – |
| Product revenueProduct gross margin was 54.6 %. | $ 987 | – | – |
| Support revenueSupport gross margin was 93.2 %. | 720 | – | – |
| Professional and Other Services revenueProfessional and Other Services gross margin was 36.6 %. | 112 | – | – |
Second Quarter of Fiscal Year 2027 and Full Fiscal Year 2027 outlook
- RevenueSecond Quarter of Fiscal Year 2027: $2.025 billion - $2.175 billion; Full Fiscal Year 2027: $7.975 billion - $8.225 billion
- Gross marginSecond Quarter of Fiscal Year 2027 GAAP: 66.0% - 67.0%; Second Quarter of Fiscal Year 2027 non-GAAP: 67.0% - 68.0%; Fiscal 2027 GAAP: 67.1% - 68.1%; Fiscal 2027 non-GAAP: 68.1% - 69.1%
- NoteSecond Quarter of Fiscal Year 2027 GAAP operating margin: 24.9% - 25.9%
- NoteSecond Quarter of Fiscal Year 2027 non-GAAP operating margin: 30.9% - 31.9%
- NoteSecond Quarter of Fiscal Year 2027 GAAP earnings per share: $1.97 - $2.07
- NoteSecond Quarter of Fiscal Year 2027 non-GAAP earnings per share: $2.54 - $2.64
- NoteFiscal 2027 GAAP operating margin: 24.3% - 25.3%
- NoteFiscal 2027 non-GAAP operating margin: 30.3% - 31.3%
- NoteFiscal 2027 GAAP earnings per share: $7.35 - $7.65
- NoteFiscal 2027 non-GAAP earnings per share: $9.73 - $10.03
Capital returns
- Repurchase of common stock: $ 200
- Dividends paid: $ 102
- The next cash dividend of $0.52 per share is to be paid on October 28, 2026, to stockholders of record as of the close of business on October 9, 2026.
What drove it
- Record all-flash array net revenue of $1.3 billion, an increase of 47% year-over-year.
- Record Public Cloud net revenue of $206 million, an increase of 28% year-over-year.
- Billings were $2.06 billion, an increase of 36% year-over-year.
- NetApp acquired DataPelago, Inc., an AI data infrastructure company, to help customers simplify and accelerate AI deployment at scale.
- NetApp announced a collaboration and an expanded collaboration with Cisco focused on AI solutions and security orchestration, automation, and response.
- Services revenue was $ 1,038, compared with $ 905 in the prior-year quarter.
Concerns
- Net cash provided by operating activities was $ 503, compared with $ 673 in the prior-year quarter.
- Free cash flow was $ 401, compared with $ 620 in the prior-year quarter.
- Free cash flow margin was 19.8 %, compared with 39.8 % in the prior-year quarter.
- GAAP gross margin was 70.1 %, compared with 70.4 % in the prior-year quarter.
- Hybrid Cloud segment gross margin was 68.8 %, compared with 70.0 % in the prior-year quarter.
- Restructuring charges were $ 56, compared with $ 2 in the prior-year quarter.
- Inventories were $ 375 as of July 31, 2026, compared with $ 198 as of April 24, 2026.
What to watch
- Second Quarter of Fiscal Year 2027 net revenue guidance of $2.025 billion - $2.175 billion.
- Second Quarter of Fiscal Year 2027 GAAP gross-margin guidance of 66.0% - 67.0% and non-GAAP gross-margin guidance of 67.0% - 68.0%.
- Second Quarter of Fiscal Year 2027 GAAP operating-margin guidance of 24.9% - 25.9% and non-GAAP operating-margin guidance of 30.9% - 31.9%.
- Fiscal 2027 net revenue guidance of $7.975 billion - $8.225 billion.
- Fiscal 2027 GAAP earnings-per-share guidance of $7.35 - $7.65 and non-GAAP earnings-per-share guidance of $9.73 - $10.03.
- The effect of the DataPelago acquisition and the reported AI, hybrid multi-cloud, and public-cloud initiatives.
Balance sheet and cash flow
- Cash, cash equivalents and investments: $ 3,576 as of July 31, 2026; $ 3,584 as of April 24, 2026.
- Current portion of long-term debt: $ 550 as of July 31, 2026.
- Long-term debt: $ 1,938 as of July 31, 2026; $ 2,487 as of April 24, 2026.
- Deferred Revenue: $ 4,846; prior-year: $ 4,526.
- Accounts receivable: $ 966 as of July 31, 2026; $ 1,286 as of April 24, 2026.
- Inventories: $ 375 as of July 31, 2026; $ 198 as of April 24, 2026.
- Purchases of property and equipment: $ 102; prior-year: $ 53.
- Acquisition of business, net of cash acquired: $ 78.
- Net cash used in investing activities: $ 674; prior-year: $ 181.
- Net cash used in financing activities: $ 319; prior-year: $ 1,157.
- Cash, cash equivalents and restricted cash at end of period: $ 1,579; prior-year: $ 2,091.
Analysis
NetApp reported first-quarter fiscal 2027 GAAP net revenues of $ 2,025, compared with $ 1,559 in the prior-year quarter, while billings were $ 2,057 compared with $ 1,511. Hybrid Cloud segment revenues were $ 1,819 and Public Cloud segment revenues were $ 206. All-flash revenues were $ 1,309 compared with $ 893, and the company characterized this as a record with a 47% year-over-year increase. Product revenue was $ 987, while services revenue was $ 1,038.
Profitability expanded on both reported bases. GAAP income from operations was $ 484, compared with $ 309, and GAAP operating margin was 23.9 %, compared with 19.8 %. Non-GAAP income from operations was $ 645, compared with $ 401, and non-GAAP operating margin was 31.9 %, compared with 25.7 %. GAAP net income was $ 375 and diluted net income per share was $ 1.88, while non-GAAP net income was $ 515 and non-GAAP diluted net income per share was $ 2.58.
Gross-margin trends were mixed across the reported measures. GAAP gross margin was 70.1 %, compared with 70.4 %, and non-GAAP gross margin was 70.6 %, compared with 71.1 %. Hybrid Cloud segment gross margin was 68.8 %, compared with 70.0 %, whereas Public Cloud segment gross margin was 86.4 %, compared with 80.1 %. Restructuring charges were $ 56, compared with $ 2, and are among the reconciling items between GAAP and non-GAAP results.
Cash conversion was lower than the prior-year quarter. Net cash provided by operating activities was $ 503, compared with $ 673, while free cash flow was $ 401, compared with $ 620. Purchases of property and equipment were $ 102, compared with $ 53, and acquisition of business, net of cash acquired, was $ 78. The company repurchased $ 200 of common stock, paid $ 102 in dividends, and declared a next cash dividend of $0.52 per share payable October 28, 2026.
The outlook calls for second-quarter fiscal 2027 net revenues of $2.025 billion - $2.175 billion and fiscal 2027 net revenues of $7.975 billion - $8.225 billion. Second-quarter GAAP earnings per share guidance is $1.97 - $2.07, with non-GAAP earnings per share guidance of $2.54 - $2.64. Full-year GAAP earnings per share guidance is $7.35 - $7.65, with non-GAAP earnings per share guidance of $9.73 - $10.03. Management highlighted demand related to AI and hybrid multi-cloud initiatives, and the company acquired DataPelago, Inc. during the quarter.
Management, verbatim
NetApp delivered a record-setting start to the year, exceeding guidance on every metric and achieving our strongest first quarter ever.
George Kurian, Chief Executive Officer
Our momentum reflects not only the trust of existing customers but also our success in winning new ones, as organizations choose the NetApp Platform to power their AI and hybrid multi-cloud initiatives.
George Kurian, Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparisons of actual first-quarter results with prior guidance are unavailable.
- Prior-quarter figures and quarter-over-quarter changes for reported operating metrics were not provided.
- Second-quarter and full-year fiscal 2027 guidance for operating expenses was not provided.
- Second-quarter and full-year fiscal 2027 guidance for tax rate was not provided.
- Year-over-year percentage changes were not printed for product, support, professional and other services, hybrid-flash and other revenues, operating income, gross margins, operating margins, effective tax rates, individual operating expenses, free cash flow margin, deferred revenue, cash balances, debt, and capital-return line items.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
NetApp's 8‑K filing provides the first public disclosure of its Q1 FY27 results and updated FY guidance.
Ticker impact
NetApp reported record Q1 FY27 revenue of $2.03B, 30% YoY growth, and raised FY2027 guidance.
Potential price appreciation in the near term as investors price in higher revenue and earnings outlook.
Quarterly results exceed expectations, margins improved, and guidance raised, all of which are material catalysts for a large-cap stock.
Market effects
Boosts outlook for the data storage and hybrid cloud sector, supporting peers with similar product lines.
Positive for U.S. technology equities, especially cloud infrastructure providers.
Reinforces demand for AI‑ready data infrastructure worldwide.
Counterpoint
If the market has already priced in the strong guidance, the stock may face a short‑term pull‑back.
Key entities
- companyNetApp, Inc.
Intelligent data infrastructure provider.
- companyDataPelago, Inc.
AI data infrastructure acquisition target.
