Key Takeaways:
NetApp Inc reported fiscal fourth-quarter revenue of $1.95 billion, beating the $1.86 billion consensus estimate, as enterprise AI adoption drove demand for its hybrid cloud and all-flash storage platforms.
"The results reflect accelerating enterprise AI adoption and our differentiated data infrastructure platform," Chief Executive Officer George Kurian said in the earnings release. "Our all-flash array revenue grew 18% year over year to $1.2 billion, and remaining performance obligations reached $5.65 billion."
Non-GAAP earnings per share came in at $2.43, surpassing the $2.27 consensus and the company's own guidance range of $2.21 to $2.31. Revenue rose 12.7% from $1.73 billion a year earlier. Hybrid Cloud segment revenue increased to $1.77 billion from $1.57 billion, while Public Cloud revenue climbed to $182 million, up 18% excluding the divested Spot business. Non-GAAP gross margin expanded 100 basis points to 70.5%, and operating margin reached a record 32%, up from 28.6%. Free cash flow totaled $900 million, representing a 46.2% margin.
Shares surged 22.1% to close at $173.84, their biggest single-day gain in years. Barclays analyst Tim Long raised his price target to $199 from $120, maintaining an Overweight rating and citing the company's positioning in AI infrastructure. The stock now trades at 29 times trailing earnings, above its five-year median of 19 times. For fiscal 2027, NetApp guided revenue of $7.325 billion to $7.575 billion, with non-GAAP EPS of $8.70 to $9.00.
The guidance raise signals management expects AI-driven demand to sustain momentum. Investors will watch the Q1 FY27 earnings call for updates on segment margin trends and the revenue contribution from the company's multiyear agreement with Google Cloud to deliver AI-ready data infrastructure for Google Distributed Cloud environments.
This article is for informational purposes only and does not constitute investment advice.
