NetApp Inc
XMUN:NTA
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NetApp Inc
NetApp makes data storage and data management systems for companies that run important applications in data centers and in the cloud. Its core products help customers store, organize, protect, and move large amounts of business data without losing access or control. The company sells both hardware and software, along with support and subscription services that keep those systems running. Its main customers are large businesses, government agencies, and technology companies that need reliable storage for databases, backups, virtual machines, and cloud workloads. NetApp earns money by selling storage appliances, licensing software, and charging for ongoing maintenance, support, and cloud-based data services. That gives it a mix of upfront product sales and recurring service revenue. NetApp sits in the middle of the data infrastructure stack, where it helps customers manage data across on-premises systems and public clouds. What makes its business different is that it is not just selling boxes or standalone software; it focuses on keeping a customer's data usable in multiple places while reducing the complexity of moving and protecting it.
NetApp makes data storage and data management systems for companies that run important applications in data centers and in the cloud. Its core products help customers store, organize, protect, and move large amounts of business data without losing access or control. The company sells both hardware and software, along with support and subscription services that keep those systems running.
Its main customers are large businesses, government agencies, and technology companies that need reliable storage for databases, backups, virtual machines, and cloud workloads. NetApp earns money by selling storage appliances, licensing software, and charging for ongoing maintenance, support, and cloud-based data services. That gives it a mix of upfront product sales and recurring service revenue.
NetApp sits in the middle of the data infrastructure stack, where it helps customers manage data across on-premises systems and public clouds. What makes its business different is that it is not just selling boxes or standalone software; it focuses on keeping a customer's data usable in multiple places while reducing the complexity of moving and protecting it.
Record quarter: NetApp reported Q1 revenue of $2.03 billion, up 30% year-over-year, exceeding the high end of guidance on every metric.
AI momentum: The company won approximately 350 AI and data lake modernization deals, with larger deal sizes as customers move from testing to production workloads.
Broad demand: Management described strength across customer sizes, industries, geographies, products and sales channels, while noting that accelerated purchases were limited to a small portion of customers.
Margin pressure: Gross margin was 70.6%, down 50 basis points year-over-year as product revenue represented 49% of sales and component costs increased.
Raised outlook: Fiscal 2027 revenue guidance increased by $650 million to a midpoint of $8.1 billion, while EPS guidance rose to a midpoint of $9.88.
Cloud and flash growth: Public cloud revenue reached $206 million, up 28%, while all-flash array revenue reached $1.31 billion, up 47%.
Strategic acquisitions: NetApp acquired DataPelago to strengthen in-place AI data processing and JetStream to expand cloud-native disaster recovery for VMware workloads.