NTAP · Q4 2026 Earnings

Bullish

NetApp

Reported May 28, 2026

30-second summary

SENTIMENT: Constructive 30-second take: NetApp printed Q4 FY2026 revenue of $1.948B (+12% YoY), clearing the high end of the prior $1.795–$1.945B guide; non-GAAP EPS of $2.43 ran $0.12 above the top of guide. Q4 non-GAAP gross margin of 70.5% met the high end of the 69.5–70.5% guide, and Q4 non-GAAP operating margin of 32.0% (+340bps YoY) printed above the 30.5–31.5% guide — both all-time records. The tension is forward: the FY27 non-GAAP gross margin guide of 68.5–69.5% sits 180–280bps below FY26's 71.3% actual and explicitly bakes in the memory/component cost inflation management started flagging two quarters ago. The shape: top-line acceleration to +12% YoY is real, the AI deal count more than doubled to ~500 in the quarter, but the FY27 revenue guide of +8% YoY decelerates from the +12% Q4 exit and management itself flagged "pockets of demand driven by accelerated purchasing."

Headline numbers

EPS

Q4 FY2026

$2.43

+7.0% vs est.

Revenue

Q4 FY2026

$1.95B

+12.0% YoY

+4.2% vs est.

Gross margin

Q4 FY2026

70.1%

Free cash flow

Q4 FY2026

$0.90B

Operating margin

Q4 FY2026

27.3%

Key financials

Q4 FY2026

Metric	Q4 FY2026	Q4 FY2025	YoY	Q3 FY2026	QoQ
Revenue	$1.95B	$1.73B	+12.5%	$1.71B	+13.7%
EPS	$2.43	$1.93	+25.9%	$2.12	+14.6%
Gross margin	70.1%	68.9%	+120bps	70.6%	-50bps
Operating margin	27.3%	20.1%	+720bps	25.3%	+200bps
Free cash flow	$0.90B	$0.64B	+40.6%	$0.27B	+232.1%

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q4 FY2026	$1.795 billion – $1.945 billion	$1.948 billion	+$0.003 billion above high end of guide	Beat
EPS (non-GAAP)	Q4 FY2026	$2.21 - $2.31	$2.43	+$0.12 above high end of guide	Beat
Gross Margin (non-GAAP)	Q4 FY2026	69.5% - 70.5%	70.1%	in-line (within range)	Met
Operating Margin (non-GAAP)	Q4 FY2026	30.5% - 31.5%	27.3%	-3.2 to -4.2 percentage points below guide	Met

New guidance

Metric	Period	Guide	YoY
Revenue	FY2027	$7.325 billion - $7.575 billion	8% YoY
EPS (non-GAAP)	FY2027	$8.70 - $9.00	9% YoY
Gross Margin (non-GAAP)	FY2027	68.5% - 69.5%	—
Operating Margin (non-GAAP)	FY2027	29.1% - 30.1%	—
Effective Tax Rate	FY2027	20% - 21%	—
Revenue	Q1 FY2027	$1.750 billion - $1.900 billion	+12% to +22% YoY
EPS (non-GAAP)	Q1 FY2027	$2.05 - $2.15	—

Product revenue

Q4 FY2026

Segment	Q4 FY2026	Q4 FY2025	YoY
Hybrid Cloud	$1.766B	$1.568B	+12.6%
Public Cloud	$0.182B	$0.164B	+11.0%
Product	$0.966B	$0.845B	+14.3%
Services	$0.982B	—	+10.7%
All-Flash Array Revenue	$1.2 billion	—	—
All-Flash Array Growth YoY	18%	—	—
Public Cloud Revenue	$182 million	—	—
Public Cloud Growth YoY	11%	—	—

Management tone

Margin bottoming (deferred 3x) → Q4 margin records delivered → Memory inflation absorbed into FY27 baseline

The narrative on the print itself is clean: record non-GAAP gross margin (70.5%), record non-GAAP operating margin (32.0%), record EPS, record FCF, and revenue above the high end with +12% YoY growth — management's strongest execution quarter of the coverage window. The forward narrative is different. The FY27 gross margin guide of 68.5–69.5% formalizes a 180–280bps step down from FY26 non-GAAP actual, with FY27 EPS guided to +9% YoY growth carried by revenue scaling rather than margin expansion. Per Q&A, the long-term product gross margin target remains mid-50s to high-50s — meaning the structural target is unchanged, but FY27 sits closer to it than FY26 did.

The AI narrative escalated, with management's release framing — "NetApp stands at the forefront of a transformative era driven by rapid AI adoption and explosive cloud growth. Enterprises are reimagining how they operate and compete, and only NetApp delivers truly hybrid intelligent data infrastructure on premises and in the cloud" — using the most assertive competitive language of this coverage window. Coupled with the 500-deal Q4 number, management is positioning AI traction as a structural growth driver. But AI revenue still has not been sized in dollars — five consecutive quarters of deal-count disclosure without a dollar number, including at the natural fiscal-year-end moment. Per Q&A, management explicitly declined to break out AI bookings or revenue.

Public cloud got rehabilitated in framing. Reported +11% Q4 / +3% FY26 are largely a Spot-divestiture comp story; ex-Spot growth was +18% YoY in both Q4 and FY26, with first-party/marketplace cloud storage services at +30% YoY in FY26. Keystone at +65% FY revenue growth and 88% RPO growth is the cleanest growth metric on the print, and management framed Keystone as a "broad market shift toward consumption-based offerings" — more durable than a pricing-driven response to NAND inflation.

Risk language remains present for a record quarter: "we recognize the potential for pockets of demand driven by accelerated purchasing" — i.e. management is flagging that part of the Q4 strength may be customers pulling forward purchases ahead of further price increases. Per Q&A, management said the Q4 P&L impact of pull-forward was minimal and the print was tied to forecasted large deals, but the FY27 guide "factored risks of pull-ins" — it is the cleanest signal that the FY27 +8% revenue guide includes meaningful conservatism.

Recurring themes management leaned on this quarter:

Enterprise AI operationalization at scale with 1,100+ wins in FY26Hybrid cloud as differentiator in zero-copy data activation for AIRecord margins and profitability (30% operating margin achieved)Public cloud acceleration (18% YoY growth, 85.7% gross margin)Keystone as-a-service momentum (65% growth, 88% YoY RPO growth)Sovereign/neo-cloud partnerships expanding TAM

Risks management surfaced:

Rising memory and component costs requiring pricing adjustmentsPotential pockets of demand driven by accelerated purchasing (near-term risk)Macro environment volatility (referenced but not detailed)Foreign currency exchange rate exposure (noted as minimal but present)Competitive displacement risk (mitigated by wins but inherent)

Q&A highlights

David Vogt · UBS

Demand strength and linearity in flash segment; impact of price changes on demand cadence across quarters

Strong momentum driven by enterprise AI readiness across all segments. Accelerated decision-making seen but minimal pull-forward impact on Q4 P&L. Results tied to forecasted large deals. Strong outlook for fiscal year driven by confidence in enterprise AI positioning.

Accelerated decision-making observed but minimal pull-forward impact on Q4All-flash growth driven by big deals previously guidedJuly quarter represents product gross margin trough with gradual improvements thereafterPrice adjustments being implemented to offset component cost increases

Amit Daryani · Evercore ISI

All-flash array growth drivers (ASP vs unit growth); AI business performance; attach rates between AI compute and high-performance storage

500 AI wins in Q4, 1,100 for full year vs. 400 prior year. All-flash elements (high performance, capacity, block storage) performed strongly. Non-AI environments showing hybrid flash adoption. Both all-flash and hybrid grew, with all-flash particularly strong in AI use cases.

500 AI wins in Q4; 1,100 for full fiscal year vs. 400 in prior fiscal yearAll elements of flash portfolio performed strongly in enterprise AI configurationsHybrid flash gaining traction in non-demanding AI environmentsHigh-performance flash used to ensure expensive GPUs are fully utilized

Eric Woodring · Morgan Stanley

AI wins contribution to fiscal 27 revenue guidance; split between public cloud and on-prem AI solutions; gross margin expansion conservatism given unprecedented pricing environment

All 500 AI wins are on-prem (enterprise and neocloud mix). Use case split: ~50% data preparation/analytics, ~25% training/fine-tuning, ~25% inference. Company is well-positioned due to installed base and hybrid cloud infrastructure. Gross margin guidance reflects current component cost information with long-term target of mid-50s to high 50s for product margins.

All 500 Q4 AI wins are on-prem (enterprise and neocloud)AI use case split: 50% data prep/analytics, 25% training/fine-tuning, 25% inferenceBroad-based strength across segments, verticals, geographies providing confidenceAdditional sales resources being invested to support fiscal 27 outlook

Wamsi Mohen · Bank of America

Large deal pipeline sustainability; pull-forward evidence vs. reseller feedback about budget acceleration and price increases; cadence of future price adjustments

Large deal pipeline included infrastructure modernization and significant AI-driven projects. Minimal pull-forward impact on Q4 P&L. Company winning in non-traditional accounts where AI projects are business priorities. Some accelerated decision-making observed but many customers lack flexibility. Management expects to provide updates as year progresses.

Large portion of pipeline tied to AI wins, some projects acceleratedStrong wins in non-traditional NetApp large install-based accountsQ4 minimal pull-forward impact on revenue; results tied to guided large dealsMany customers lack flexibility to accelerate purchasing decisions

Tim Long · Barclays

Public cloud revenue sustainability without Spot platform; Google distributed cloud deal impact; Keystone adoption durability vs. pricing-driven purchasing

Cloud storage services (first-party and marketplace) grew 30% YoY. Continued momentum expected with acceleration into FY27 at strong gross margins. AI use cases emerging in cloud. Keystone reflects broad market shift toward consumption-based offerings, driven by customer familiarity with public cloud operations and cost optimization; more durable than pricing-driven. Google deal in hybrid cloud segment.

Cloud storage (1P and marketplace) grew 30% YoYCloud expected to grow faster next year than prior yearAI use cases beginning to appear in cloud offeringsKeystone seeing broad-based market shift toward consumption-based models

Answers to last quarter's watch list

Q4 FY2026 revenue vs. the $1.795–$1.945B guide. Printed at $1.948B, +$3M above the high end and well above the $1.90B "demand intensity confirmed" threshold. The +12% YoY growth is the strongest of FY26 and is consistent with the "real and recurring" demand framing. However, management's "pockets of accelerated purchasing" hedge and the deceleration baked into the FY27 +8% guide qualify the read. Status: Resolved positively

Non-GAAP gross margin vs. the 69.5–70.5% Q4 guide. Printed at 70.5%, at the high end. FY26 non-GAAP gross margin held at 71.3% — but the FY27 guide of 68.5–69.5% breaks that level by 180–280bps. The Q4 result is clean; FY27 forces an explicit margin reset. Status: Resolved positively (Q4); Resolved negatively (FY27 forward)

FY27 margin framing in prepared remarks. Management provided explicit FY27 gross and operating margin ranges (68.5–69.5% and 29.1–30.1%) — i.e. they did not refuse to guide. But the gross margin range sits 180–280bps below FY26 actual, confirming the structural compression management telegraphed at Q3. Status: Resolved negatively

AI revenue dollar disclosure. Management again declined to size FY26 AI revenue in dollars. Deal count was disclosed (~500 in Q4, ~1,100 in FY26 vs ~400 in FY25), and use-case mix was disclosed in Q&A, but five consecutive quarters of deferred dollar disclosure is now the pattern. Status: Continue monitoring

Public Cloud reported growth crossing positive territory. Reported Public Cloud printed +11% YoY at $182M; ex-Spot growth was +18%. Per prepared remarks, first-party/marketplace cloud storage services grew 30% YoY in FY26. The headline number aligned with the underlying ex-Spot story as the divestiture comp rolled off. Status: Resolved positively

Pricing action cadence. Management committed in prepared remarks to continued price adjustments as memory and component costs move, with the FY27 gross margin guide baking in known cost headwinds. The pricing commitment is now permanent posture, not a one-time action. Status: Continue monitoring

Billings momentum. Q4 billings grew +6% YoY to $2.163B and FY26 billings grew +6% YoY to $7.206B — in line. Within Q4, revenue grew +12% while billings grew +6%, which reflects deferred revenue dynamics (Google distributed cloud agreement, mix) rather than a sequential deceleration. Status: Resolved neutrally

What to watch into next quarter

Q1 FY2027 revenue vs. the $1.750–$1.900B guide. Midpoint $1.825B includes ~$65M extra-week contribution; underlying organic implies ~$1.76B at +13% YoY vs the $1.56B Q1 FY26 base. A print below $1.80B reported (or $1.74B ex-week) would validate the "accelerated purchasing pull-forward" hedge as a real Q1 air pocket. A print above $1.87B reported would suggest the FY27 +8% guide has cushion.

Q1 FY2027 non-GAAP gross margin vs. the 69.1–70.1% guide. Management explicitly called Q1 the FY27 product margin trough. A print at 69.0% or below would mean the trough is deeper than guided and put the FY27 68.5–69.5% gross margin floor at risk before the year has started. A print at the midpoint or above is the minimum to keep the FY27 framework intact.

Billings trajectory in Q1. Q4 and FY26 billings both ran +6% YoY. Watch whether Q1 FY27 billings re-accelerate to validate the +12% Q4 revenue exit, or whether the in-quarter divergence between billings and revenue persists into Q1.

AI revenue dollar disclosure at Q1. Five consecutive quarters of deferred dollar disclosure. The opening quarter of FY27, with the ~1,100 FY26 deal-count baseline established, is the natural moment to size the FY26 AI revenue base or provide an FY27 AI revenue target. Continued non-disclosure would itself become a signal.

Keystone and Public Cloud Storage Services growth rates. Keystone at +65% FY revenue growth and +88% RPO is the cleanest momentum metric on the print. Watch whether Keystone growth sustains above +50% YoY in Q1 and whether first-party/marketplace cloud storage services holds above +25% YoY — these are the high-margin lines that can offset the gross margin reset if they scale.

Whether FY27 revenue guide gets raised at Q1. The +8% FY27 guide decelerates from the +12% Q4 exit. A Q1 in-line print likely produces no raise; a clean Q1 beat with billings re-acceleration would force the first FY27 revenue raise. A Q1 miss against the guide would force the back-half of FY27 to carry an even steeper acceleration and call the +8% framework into question.

Sources

NetApp Q4 FY2026 press release / 8-K exhibit, filed with SEC: https://www.sec.gov/Archives/edgar/data/1002047/000119312526245196/ntap-ex99_1.htm
NetApp Q4 FY2026 earnings call prepared remarks and Q&A

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