NetApp 2025 Q4 Earnings Strong Performance as Net Income Rises 16.8%

NetApp (NTAP) reported its fiscal 2025 Q4 earnings on May 29th, 2025. The company posted a net income of $340 million for Q4 2025, reflecting a substantial 16.8% increase from $291 million in the same quarter of the previous fiscal year. However, NetApp's guidance for fiscal 2026 remains cautious, projecting a slight revenue decline for Q1 2026, which fell short of analysts' expectations. Despite these mixed results, NetApp's strategic focus on growth areas such as all-flash storage and marketplace storage services positions the company for long-term success.

Revenue
NetApp's total revenue for fiscal 2025 Q4 climbed to $1.73 billion, marking a 3.8% increase from $1.67 billion in Q4 2024. The revenue breakdown includes product revenues at $845 million, support revenues amounting to $625 million, professional and other services revenues contributing $98 million, and public cloud revenues generating $164 million.

Earnings/Net Income
NetApp's EPS rose significantly by 18.4% to $1.67 in 2025 Q4, up from $1.41 in 2024 Q4. The company's strengthened profitability is underscored by a net income of $340 million, marking a 16.8% increase from $291 million in 2024 Q4. The EPS growth reflects positive operational performance.

Price Action
The stock price of NetApp has edged down 0.79% during the latest trading day, has edged down 0.36% during the most recent full trading week, and has jumped 12.74% month-to-date.

Post-Earnings Price Action Review
A strategy of purchasing NetApp (NTAP) shares after quarterly revenue increases and holding for 30 days yielded a 31.00% return over the past three years. However, this approach underperformed compared to the benchmark, which achieved a 39.33% return, resulting in an excess return of -8.33%. The strategy's compound annual growth rate (CAGR) was 9.53%, accompanied by a maximum drawdown of -46.65% and a Sharpe ratio of 0.28, indicating moderate returns paired with significant risk. The analysis suggests that while the strategy offers potential for gains, it carries notable volatility and may not match broader market performance.

CEO Commentary
George Kurian, Chief Executive Officer, highlighted record revenue in Q4 2025, driven by strong growth in all-flash storage and marketplace storage services. He emphasized that over two-thirds of total revenue now stems from these growth areas, positioning NetApp for sustained top-line growth. Kurian noted the urgency for organizations to modernize their data infrastructure amid evolving enterprise AI demands, stating, "NetApp’s unified data architecture... enables customers to build an intelligent data infrastructure." He expressed confidence in the company's ability to capitalize on AI opportunities, stating, “We plan to make prudent investments in R&D and sales capacity to drive ongoing innovation.”

Guidance
NetApp expects fiscal year 2026 total revenue in the range of $6.625 billion to $6.875 billion, reflecting approximately 3% year-over-year growth at the midpoint. EPS is projected between $7.60 and $7.90, with a midpoint of $7.75. For Q1 2026, revenue guidance is set between $1.455 billion and $1.605 billion, implying a 1% revenue decline year-over-year. The company anticipates consolidated gross margin for FY 2026 to be between 71% and 72%, with operating margin expected at approximately 28.8% to 29.8%.

Additional News
In recent developments, NetApp announced the appointment of Wissam Jabre as Executive Vice President and Chief Financial Officer, effective from March 10, 2025. Jabre brings over 20 years of experience in leading finance organizations, which is expected to strengthen the company's financial leadership. Additionally, NetApp declared a cash dividend of $0.52 per share, payable on April 23, 2025, to shareholders of record as of April 4, 2025. This move underscores NetApp's commitment to returning value to its shareholders. Furthermore, the company's stock repurchase program continues, reflecting its strategy of enhancing shareholder returns through buybacks.