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NTAP Q1 Earnings Beat Estimates on Hybrid, Public Cloud Revenue Growth
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Key Takeaways
NetApp posted record Q1 revenue of $2.03B, up 29.9%, while non-GAAP EPS rose 66.5%.
Hybrid Cloud revenue jumped 30.1%, led by all-flash growth and strong demand for AI workloads.
NetApp raised FY27 revenue guidance to $7.975-$8.225B, with an EPS range of $9.73-$10.03.
NetApp, Inc. (NTAP - Free Report) recently reported a record first-quarter fiscal 2027, with strong momentum across its Hybrid Cloud and Public Cloud businesses. The company generated quarterly net revenues of $2.03 billion, up 29.9% year over year, while non-GAAP earnings per share of $2.58 increased 66.5% year over year. The bottom line beat the Zacks Consensus Estimate of $2.13 by 21.1%.
Revenue growth was driven by broad-based momentum across the business, reflecting a healthier demand environment as customers invested in AI and modernization, along with some accelerated purchases and pricing benefits.
The Zacks Consensus Estimate for Hybrid Cloud and Public Cloud businesses’ revenues was $1.65 billion and $196 million, respectively.
Hybrid Cloud revenues were $1.82 billion in the reported quarter, increasing 30.1% year over year and 27% after adjusting for the additional week in the quarter. Product revenues increased 50.9% year over year to $987 million, while Support revenues rose 11.3% to $720 million. Professional Services revenues totaled $112 million, up 15.5% year over year, mainly driven by continued robust growth in Keystone, NetApp’s storage-as-a-service offering.
All-flash revenues acted as another key contributor to the Hybrid Cloud business, reaching $1.31 billion, up 46.6% year over year. Customers continued to standardize on NetApp for mission-critical workloads, including GPU-intensive AI pipelines requiring high performance, low latency and built-in cyber resilience. The company also noted accelerating interest in its hybrid flash solutions.
Public Cloud Revenues Grow
Public Cloud revenues increased 28% year over year to $206 million in first-quarter fiscal 2027 and grew 19% after adjusting for the additional week. The growth reflected strong demand for first-party and marketplace storage services. The additional week contributed approximately $15 million to Public Cloud revenue.
NetApp continued to see strength in its cloud storage business as customers migrated workloads to the cloud. VMware workloads, in particular, are increasingly being moved to the cloud, creating opportunities for NetApp. During the quarter, a U.S. hospitality company adopted NetApp technology through Amazon FSx for NetApp ONTAP to support a large-scale VMware migration to AWS. A U.S. public sector organization also selected Azure NetApp Files for data modernization efforts.
On the latest earnings call, management stated that Public Cloud growth remained in the high teens as the business scaled, with continued strength in first-party and marketplace storage services. The company also highlighted additional AI solutions with hyperscalers, use cases combining on-premises data with hyperscale cloud and block storage and lower-cost price points across multiple clouds, including Google and Amazon.
NetApp Raises FY27 Outlook
Driven by the strong fiscal first-quarter performance, NetApp raised its fiscal 2027 outlook. The company now expects revenues at $7.975-$8.225 billion, with the $8.10 billion midpoint representing 17% growth and a $650 million increase from prior guidance. The Zacks Consensus Estimate is currently pinned at $7.56 billion.
Non-GAAP gross margin is expected at 68.1-69.1%, operating margin at 30.3-31.3% and earnings at $9.73-$10.03 per share. The $9.88 earnings midpoint represents 22% year-over-year growth. The Zacks Consensus Estimate is currently pinned at $9.07 per share.
SanDisk (SNDK - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $39.25 per share that beat the Zacks Consensus Estimate by 14.63% and jumped 68% sequentially. The company reported earnings of 29 cents per share in the year-ago quarter. Revenues surged 371.6% year over year to $8.97 billion and beat the consensus mark by 8%. Sequentially, SNDK’s revenues surged 51%. Stronger pricing, higher volumes and rapid Datacenter growth drove the upside, with Datacenter revenues hitting $2.98 billion in the reported quarter.
Teradata Corporation (TDC - Free Report) reported second-quarter 2026 non-GAAP earnings of 69 cents per share, up 46.8% year over year. The figure surpassed the Zacks Consensus Estimate by 25.46%. Revenues of $410 million increased 0.5% from the year-ago quarter and beat the consensus by 2.91%. TDC’s Total annual recurring revenues increased 1% as reported and 2% in constant currency to $1.509 billion.
Super Micro Computer, Inc. (SMCI - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $1.70 per share, beating the Zacks Consensus Estimate of 68 cents. The bottom line increased 315% year over year. SMCI generated net sales of $11.12 billion, which increased 93% year over year and 9% sequentially. Revenues also beat the Zacks Consensus Estimate by 1.09%. The strong performance reflected continued demand for AI infrastructure, as well as a sharp pickup in enterprise and channel activity.
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NTAP Q1 Earnings Beat Estimates on Hybrid, Public Cloud Revenue Growth
Key Takeaways
NetApp, Inc. (NTAP - Free Report) recently reported a record first-quarter fiscal 2027, with strong momentum across its Hybrid Cloud and Public Cloud businesses. The company generated quarterly net revenues of $2.03 billion, up 29.9% year over year, while non-GAAP earnings per share of $2.58 increased 66.5% year over year. The bottom line beat the Zacks Consensus Estimate of $2.13 by 21.1%.
Revenue growth was driven by broad-based momentum across the business, reflecting a healthier demand environment as customers invested in AI and modernization, along with some accelerated purchases and pricing benefits.
The Zacks Consensus Estimate for Hybrid Cloud and Public Cloud businesses’ revenues was $1.65 billion and $196 million, respectively.
NetApp, Inc. Price, Consensus and EPS Surprise
NetApp, Inc. price-consensus-eps-surprise-chart | NetApp, Inc. Quote
Hybrid Cloud Revenues Rise
Hybrid Cloud revenues were $1.82 billion in the reported quarter, increasing 30.1% year over year and 27% after adjusting for the additional week in the quarter. Product revenues increased 50.9% year over year to $987 million, while Support revenues rose 11.3% to $720 million. Professional Services revenues totaled $112 million, up 15.5% year over year, mainly driven by continued robust growth in Keystone, NetApp’s storage-as-a-service offering.
All-flash revenues acted as another key contributor to the Hybrid Cloud business, reaching $1.31 billion, up 46.6% year over year. Customers continued to standardize on NetApp for mission-critical workloads, including GPU-intensive AI pipelines requiring high performance, low latency and built-in cyber resilience. The company also noted accelerating interest in its hybrid flash solutions.
Public Cloud Revenues Grow
Public Cloud revenues increased 28% year over year to $206 million in first-quarter fiscal 2027 and grew 19% after adjusting for the additional week. The growth reflected strong demand for first-party and marketplace storage services. The additional week contributed approximately $15 million to Public Cloud revenue.
NetApp continued to see strength in its cloud storage business as customers migrated workloads to the cloud. VMware workloads, in particular, are increasingly being moved to the cloud, creating opportunities for NetApp. During the quarter, a U.S. hospitality company adopted NetApp technology through Amazon FSx for NetApp ONTAP to support a large-scale VMware migration to AWS. A U.S. public sector organization also selected Azure NetApp Files for data modernization efforts.
On the latest earnings call, management stated that Public Cloud growth remained in the high teens as the business scaled, with continued strength in first-party and marketplace storage services. The company also highlighted additional AI solutions with hyperscalers, use cases combining on-premises data with hyperscale cloud and block storage and lower-cost price points across multiple clouds, including Google and Amazon.
NetApp Raises FY27 Outlook
Driven by the strong fiscal first-quarter performance, NetApp raised its fiscal 2027 outlook. The company now expects revenues at $7.975-$8.225 billion, with the $8.10 billion midpoint representing 17% growth and a $650 million increase from prior guidance. The Zacks Consensus Estimate is currently pinned at $7.56 billion.
Non-GAAP gross margin is expected at 68.1-69.1%, operating margin at 30.3-31.3% and earnings at $9.73-$10.03 per share. The $9.88 earnings midpoint represents 22% year-over-year growth. The Zacks Consensus Estimate is currently pinned at $9.07 per share.
NTAP’s Zacks Rank & Stock Price
NetApp currently carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Releases in the Storage Space
SanDisk (SNDK - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $39.25 per share that beat the Zacks Consensus Estimate by 14.63% and jumped 68% sequentially. The company reported earnings of 29 cents per share in the year-ago quarter. Revenues surged 371.6% year over year to $8.97 billion and beat the consensus mark by 8%. Sequentially, SNDK’s revenues surged 51%. Stronger pricing, higher volumes and rapid Datacenter growth drove the upside, with Datacenter revenues hitting $2.98 billion in the reported quarter.
Teradata Corporation (TDC - Free Report) reported second-quarter 2026 non-GAAP earnings of 69 cents per share, up 46.8% year over year. The figure surpassed the Zacks Consensus Estimate by 25.46%. Revenues of $410 million increased 0.5% from the year-ago quarter and beat the consensus by 2.91%. TDC’s Total annual recurring revenues increased 1% as reported and 2% in constant currency to $1.509 billion.
Super Micro Computer, Inc. (SMCI - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $1.70 per share, beating the Zacks Consensus Estimate of 68 cents. The bottom line increased 315% year over year. SMCI generated net sales of $11.12 billion, which increased 93% year over year and 9% sequentially. Revenues also beat the Zacks Consensus Estimate by 1.09%. The strong performance reflected continued demand for AI infrastructure, as well as a sharp pickup in enterprise and channel activity.