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NetApp, Inc. (NTAP - Free Report) reported fourth-quarter fiscal 2025 non-GAAP earnings of $1.93 per share, which beat the Zacks Consensus Estimate by 1.6%. The figure rose 7.2% year over year. The bottom line was within the company’s guided range of $1.84-$1.94.
Revenues of $1.73 billion increased 3.8% year over year. The figure was within the guidance of $1.65-$1.8 billion. The top line beat the consensus mark by 0.2%. NTAP witnessed growth in the all-flash array business and a 44% jump in first-party and marketplace cloud storage services revenues in the fiscal fourth quarter.
For fiscal 2025, revenues rose 5% year over year to $6.57 billion while non-GAAP earnings were $7.25 per share, up 12.4%.
Management initiated the outlook for fiscal 2026. It highlighted mixed signals for global macroeconomic outlook reflecting an overall slowdown in growth, lingering inflation concerns and a significantly higher uncertainty. NTAP expects increases in spending caution and ongoing friction in the U.S. Public Sector and the EMEA.
It expects fiscal 2026 revenues in the range of $6.625-$6.875 billion, up 3% year over year at the mid-point. Non-GAAP earnings per share are forecasted to be between $7.60 and $7.90. Non-GAAP gross margin is anticipated to be 71-72% and non-GAAP operating margin to be in the band of 28.8-29.8%.
Image Source: Zacks Investment Research
Following the announcement, NTAP’s shares are down 4.8% in the pre-market trading session today. In the past month, shares have risen 10.6% compared with the Computer Storage Devices industry’s growth of 19.1%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
NTAP’s Top-Line Details
NTAP reports revenues under two segments, Hybrid Cloud and Public Cloud.
The Hybrid Cloud segment includes revenues from the enterprise data center business, including product, support and professional services.
The Public Cloud segment comprises revenues from products delivered as a service and related support. The portfolio contains cloud automation and optimization services, storage and cloud infrastructure monitoring services.
Revenues from the Hybrid Cloud segment increased 3% year over year to $1.57 billion. The Public Cloud segment’s revenues improved 8% to $164 million. Excluding the divested Spot business, Public Cloud revenues grew 22% year over year in the fiscal fourth quarter.
First-party and marketplace cloud storage services were roughly 75% of Public Cloud segment revenues, while all-flash was approximately two-thirds of Hybrid Cloud segment revenues.
We expected fiscal fourth-quarter revenues from the Hybrid Cloud and Public Cloud segments to be $1.549 billion and $175.6 million, respectively.
Within the Hybrid Cloud segment, Product revenues (53.9% of segmental revenues) increased 5% year over year to $845 million.
Revenues from Support Contracts (39.9%) totaled $625 million, flat year over year. Professional and Other Services revenues (6.2%) amounted to $98 million, up 13%.
Region-wise, the Americas, Europe, the Middle East and Africa, and Asia Pacific contributed 51%, 34% and 15% to total revenues, respectively.
Direct and indirect revenues added 22% and 78%, respectively, to total revenues.
Key Metrics of NTAP
In the fiscal fourth quarter, the company’s All-Flash Array Business’ annualized net revenue run rate was $4.1 billion, up 14% year over year. Total billings rose 12% year over year to $2 billion. Deferred revenues totaled $4.5 billion, up 7%. Remaining performance obligations (“RPO”) were $4.97 billion, while the Unbilled RPO was $430 million.
NTAP’s Operating Details
Non-GAAP gross margin of 69.5% was down 200 basis points (bps) from the prior-year quarter’s levels.
The Hybrid segment’s gross margin was 68.4% compared with 71.8% in the prior year. The Public Cloud segment witnessed a gross margin of 79.3%, up from 68.4%.
Non-GAAP operating expenses were $707 million, down 2% from the year-ago quarter.
Non-GAAP operating income rose 5.8% year over year to $496 million. Non-GAAP operating margin was 28.6%, up from the prior year's figure of 28.1%.
NTAP’s Balance Sheet & Cash Flow
NetApp exited the quarter ended April 25, 2025, with $3.85 billion in cash, cash equivalents and investments compared with $2.26 billion as of Jan. 24, 2025.
Long-term debt was $2.485 billion compared with $1.244 billion as of Jan. 24, 2025.
Net cash from operations was $675 million compared with $613 million in the previous year's quarter.
Free cash flow was $640 million (free cash flow margin of 37%) compared with $567 million in the prior-year quarter (34%). Improvement in free cash flow was mainly due to higher collections and lower supply-chain payments.
The company returned $355 million to its shareholders as dividend payouts and share repurchases in the fiscal fourth quarter. NetApp has $350 million worth of shares remaining under its existing authorization. It also announced a $1.1 billion increase in buyback authorization. For fiscal 2025, the company returned $1.57 billion to its shareholders.
NTAP also announced a dividend of 52 cents per share payable on July 23, 2025, to its shareholders of record as of the close of business on July 3.
NTAP’s Q1 Guidance
Management expects non-GAAP earnings per share to be between $1.48 and $1.58. The Zacks Consensus Estimate is pegged at $1.68 per share.
Net revenues are anticipated to be in the range of $1.455-$1.605 billion. The Zacks Consensus Estimate is pegged at $1.59 billion.
Recent Performance of Other Companies in Tech Space
Pure Storage (PSTG - Free Report) reported first-quarter fiscal 2026 non-GAAP earnings per share (EPS) of 29 cents, which beat the Zacks Consensus Estimate by 16%. PSTG posted non-GAAP EPS of 32 cents in the prior-year quarter. Quarterly revenues grew 12% from the prior-year quarter to $778.5 million, surpassing the Zacks Consensus Estimate by 0.95%. Continued strong demand for Pure's unique data storage offerings drove the top line. TCV sales for its Storage-as-a-Service surged 70% to $95 million, fueled by both large Evergreen//One transactions of more than $5 million and higher-velocity transactions under $5 million. Shares of Pure Storage have risen 18.3% in the past month.
Western Digital Corporation (WDC - Free Report) reported third-quarter fiscal 2025 non-GAAP earnings of $1.36 per share, which surpassed the Zacks Consensus Estimate of $1.17. The company reported earnings of 63 cents per share in the prior-year quarter. Management anticipated fiscal third-quarter non-GAAP earnings per share to be between 90 cents and $1.20. Western Digital’s revenues of $2.29 billion surged 31% year over year, beating the Zacks Consensus Estimate of $2.24 billion. The upside resulted from increasing demand momentum across Cloud end markets. On a sequential basis, revenues decreased 5%. For third-quarter fiscal 2025, the company expected non-GAAP revenues in the range of $3.75-$3.95 billion. Shares of WDC have risen 19.8% in the past month.
Teradata (TDC - Free Report) first-quarter 2025 non-GAAP earnings of 66 cents per share beat the Zacks Consensus Estimate by 15.79%. The bottom line increased 15.8% year over year. Teradata’s revenues of $418 million missed the Zacks Consensus Estimate by 1.71%. The figure declined 10% year over year on a reported basis and 8% on a constant-currency (cc) basis. Total annual recurring revenues at the end of the first quarter declined 3% year over year to $1.442 billion. The figure fell 2% at cc. Shares of Teradata are up 1.4% in the past month.
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NetApp's Q4 Earnings & Revenues Beat Estimates, Rise Y/Y, Stock Down
NetApp, Inc. (NTAP - Free Report) reported fourth-quarter fiscal 2025 non-GAAP earnings of $1.93 per share, which beat the Zacks Consensus Estimate by 1.6%. The figure rose 7.2% year over year. The bottom line was within the company’s guided range of $1.84-$1.94.
Revenues of $1.73 billion increased 3.8% year over year. The figure was within the guidance of $1.65-$1.8 billion. The top line beat the consensus mark by 0.2%. NTAP witnessed growth in the all-flash array business and a 44% jump in first-party and marketplace cloud storage services revenues in the fiscal fourth quarter.
For fiscal 2025, revenues rose 5% year over year to $6.57 billion while non-GAAP earnings were $7.25 per share, up 12.4%.
Management initiated the outlook for fiscal 2026. It highlighted mixed signals for global macroeconomic outlook reflecting an overall slowdown in growth, lingering inflation concerns and a significantly higher uncertainty. NTAP expects increases in spending caution and ongoing friction in the U.S. Public Sector and the EMEA.
It expects fiscal 2026 revenues in the range of $6.625-$6.875 billion, up 3% year over year at the mid-point. Non-GAAP earnings per share are forecasted to be between $7.60 and $7.90. Non-GAAP gross margin is anticipated to be 71-72% and non-GAAP operating margin to be in the band of 28.8-29.8%.
Image Source: Zacks Investment Research
Following the announcement, NTAP’s shares are down 4.8% in the pre-market trading session today. In the past month, shares have risen 10.6% compared with the Computer Storage Devices industry’s growth of 19.1%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
NTAP’s Top-Line Details
NTAP reports revenues under two segments, Hybrid Cloud and Public Cloud.
The Hybrid Cloud segment includes revenues from the enterprise data center business, including product, support and professional services.
The Public Cloud segment comprises revenues from products delivered as a service and related support. The portfolio contains cloud automation and optimization services, storage and cloud infrastructure monitoring services.
Revenues from the Hybrid Cloud segment increased 3% year over year to $1.57 billion. The Public Cloud segment’s revenues improved 8% to $164 million. Excluding the divested Spot business, Public Cloud revenues grew 22% year over year in the fiscal fourth quarter.
NetApp, Inc. Price, Consensus and EPS Surprise
NetApp, Inc. price-consensus-eps-surprise-chart | NetApp, Inc. Quote
First-party and marketplace cloud storage services were roughly 75% of Public Cloud segment revenues, while all-flash was approximately two-thirds of Hybrid Cloud segment revenues.
We expected fiscal fourth-quarter revenues from the Hybrid Cloud and Public Cloud segments to be $1.549 billion and $175.6 million, respectively.
Within the Hybrid Cloud segment, Product revenues (53.9% of segmental revenues) increased 5% year over year to $845 million.
Revenues from Support Contracts (39.9%) totaled $625 million, flat year over year. Professional and Other Services revenues (6.2%) amounted to $98 million, up 13%.
Region-wise, the Americas, Europe, the Middle East and Africa, and Asia Pacific contributed 51%, 34% and 15% to total revenues, respectively.
Direct and indirect revenues added 22% and 78%, respectively, to total revenues.
Key Metrics of NTAP
In the fiscal fourth quarter, the company’s All-Flash Array Business’ annualized net revenue run rate was $4.1 billion, up 14% year over year. Total billings rose 12% year over year to $2 billion. Deferred revenues totaled $4.5 billion, up 7%. Remaining performance obligations (“RPO”) were $4.97 billion, while the Unbilled RPO was $430 million.
NTAP’s Operating Details
Non-GAAP gross margin of 69.5% was down 200 basis points (bps) from the prior-year quarter’s levels.
The Hybrid segment’s gross margin was 68.4% compared with 71.8% in the prior year. The Public Cloud segment witnessed a gross margin of 79.3%, up from 68.4%.
Non-GAAP operating expenses were $707 million, down 2% from the year-ago quarter.
Non-GAAP operating income rose 5.8% year over year to $496 million. Non-GAAP operating margin was 28.6%, up from the prior year's figure of 28.1%.
NTAP’s Balance Sheet & Cash Flow
NetApp exited the quarter ended April 25, 2025, with $3.85 billion in cash, cash equivalents and investments compared with $2.26 billion as of Jan. 24, 2025.
Long-term debt was $2.485 billion compared with $1.244 billion as of Jan. 24, 2025.
Net cash from operations was $675 million compared with $613 million in the previous year's quarter.
Free cash flow was $640 million (free cash flow margin of 37%) compared with $567 million in the prior-year quarter (34%). Improvement in free cash flow was mainly due to higher collections and lower supply-chain payments.
The company returned $355 million to its shareholders as dividend payouts and share repurchases in the fiscal fourth quarter. NetApp has $350 million worth of shares remaining under its existing authorization. It also announced a $1.1 billion increase in buyback authorization. For fiscal 2025, the company returned $1.57 billion to its shareholders.
NTAP also announced a dividend of 52 cents per share payable on July 23, 2025, to its shareholders of record as of the close of business on July 3.
NTAP’s Q1 Guidance
Management expects non-GAAP earnings per share to be between $1.48 and $1.58. The Zacks Consensus Estimate is pegged at $1.68 per share.
Net revenues are anticipated to be in the range of $1.455-$1.605 billion. The Zacks Consensus Estimate is pegged at $1.59 billion.
NTAP’s Zacks Rank
NetApp currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies in Tech Space
Pure Storage (PSTG - Free Report) reported first-quarter fiscal 2026 non-GAAP earnings per share (EPS) of 29 cents, which beat the Zacks Consensus Estimate by 16%. PSTG posted non-GAAP EPS of 32 cents in the prior-year quarter. Quarterly revenues grew 12% from the prior-year quarter to $778.5 million, surpassing the Zacks Consensus Estimate by 0.95%. Continued strong demand for Pure's unique data storage offerings drove the top line. TCV sales for its Storage-as-a-Service surged 70% to $95 million, fueled by both large Evergreen//One transactions of more than $5 million and higher-velocity transactions under $5 million. Shares of Pure Storage have risen 18.3% in the past month.
Western Digital Corporation (WDC - Free Report) reported third-quarter fiscal 2025 non-GAAP earnings of $1.36 per share, which surpassed the Zacks Consensus Estimate of $1.17. The company reported earnings of 63 cents per share in the prior-year quarter. Management anticipated fiscal third-quarter non-GAAP earnings per share to be between 90 cents and $1.20. Western Digital’s revenues of $2.29 billion surged 31% year over year, beating the Zacks Consensus Estimate of $2.24 billion. The upside resulted from increasing demand momentum across Cloud end markets. On a sequential basis, revenues decreased 5%. For third-quarter fiscal 2025, the company expected non-GAAP revenues in the range of $3.75-$3.95 billion. Shares of WDC have risen 19.8% in the past month.
Teradata (TDC - Free Report) first-quarter 2025 non-GAAP earnings of 66 cents per share beat the Zacks Consensus Estimate by 15.79%. The bottom line increased 15.8% year over year. Teradata’s revenues of $418 million missed the Zacks Consensus Estimate by 1.71%. The figure declined 10% year over year on a reported basis and 8% on a constant-currency (cc) basis. Total annual recurring revenues at the end of the first quarter declined 3% year over year to $1.442 billion. The figure fell 2% at cc. Shares of Teradata are up 1.4% in the past month.