NetApp’s first quarter results saw a marked positive response from the market, as revenue and non-GAAP earnings per share both exceeded Wall Street expectations. Management attributed the robust top-line growth to strong enterprise demand for AI-enabled data infrastructure and continued momentum in both public cloud and all-flash storage solutions. CEO George Kurian emphasized that NetApp’s ability to support real-time, secure, and hybrid data activation for AI workloads helped the company win significant new business, particularly with large enterprises and cloud service providers. The company also highlighted the success of its Keystone storage-as-a-service offering and pointed to operational discipline as a key factor behind the improved operating margin.
Is now the time to buy NTAP? Find out in our full research report (it’s free for active Edge members).
NetApp (NTAP) Q1 CY2026 Highlights:
- Revenue: $1.95 billion vs analyst estimates of $1.87 billion (12.5% year-on-year growth, 4.1% beat)
- Adjusted EPS: $2.43 vs analyst estimates of $2.27 (7.2% beat)
- Revenue Guidance for Q2 CY2026 is $1.83 billion at the midpoint, above analyst estimates of $1.68 billion
- Adjusted EPS guidance for the upcoming financial year 2027 is $8.85 at the midpoint, beating analyst estimates by 3.7%
- Operating Margin: 27.3%, up from 20.1% in the same quarter last year
- Billings: $2.16 billion at quarter end, up 6.4% year on year
- Market Capitalization: $35.73 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From NetApp’s Q1 Earnings Call
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David Vogt (UBS) asked about the sustainability of all-flash demand and whether pricing changes or accelerated purchasing affected quarterly results. CEO George Kurian said Q4 results were primarily driven by previously anticipated large deals, with minimal impact from accelerated decision-making.
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Amit Daryanani (Evercore ISI) inquired about the balance of average selling price versus unit growth in all-flash arrays and the attachment rate of AI compute deployments. Kurian noted that both high-performance and capacity flash segments contributed to growth, especially in AI use cases.
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Erik Woodring (Morgan Stanley) questioned how much of next year’s revenue outlook is attributable to AI wins and the mix between public cloud and on-premises solutions. Kurian responded that all 500 AI wins were on-premises, with broad-based demand across verticals and geographies.
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Timothy Long (Barclays) asked about the durability of public cloud growth and the factors driving Keystone’s momentum. Kurian explained that first-party and marketplace cloud storage services are growing rapidly and that Keystone’s consumption-based model appeals to customers seeking cloud-like flexibility.
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Paramveer Singh (Oppenheimer) sought clarification on the monetization strategy for NetApp’s AI Data Engine (AIDE) and its impact on revenue. Kurian outlined that AIDE strengthens NetApp’s competitive moat with the existing base and serves as a bundled solution for new customers, with pricing linked to data volume and use case complexity.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will watch (1) the pace of AI-driven customer wins and their conversion into recurring revenue, (2) the impact of supply chain and component cost fluctuations on gross margins, and (3) continued progress in expanding NetApp’s partnerships with hyperscale and sovereign cloud providers. Developments in Keystone adoption and early revenue contributions from new AI-focused products like AFX and AIDE will also be critical markers of execution.
NetApp currently trades at $177.00, up from $142.40 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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