NetApp 2026 Q2 Earnings Beats Expectations with 2.0% Net Income Growth

NetApp (NTAP) reported fiscal 2026 Q2 earnings on November 25, 2025, exceeding revenue expectations and raising full-year guidance. The company delivered 3% year-over-year revenue growth and improved profitability, driven by strong performance in all-flash and cloud solutions.

Revenue

NetApp’s total revenue rose 2.8% to $1.71 billion in Q2 2026, with product revenues rising to $788 million and support services contributing $647 million. Professional services and other segments accounted for $99 million, while public cloud revenue reached $171 million. These results highlight the company’s focus on high-margin offerings, particularly in hybrid and public cloud solutions.

Earnings/Net Income

NetApp’s EPS increased 4.1% to $1.53, with net income rising 2.0% to $305 million. The 4.1% EPS growth reflects improved profitability, underscoring the company’s operational efficiency and strategic focus on high-margin markets.

Post-Earnings Price Action Review

The strategy of buying NetApp shares after its revenue beat expectations on the financial report release date and holding for 30 days yielded an 8.61% return over the past three years. However, this underperformed the benchmark return of 65.99%, with an excess return of -57.38% and a CAGR of 2.81%. The strategy’s maximum drawdown of 0.00% and Sharpe ratio of 0.09 indicate a low-risk profile but modest returns relative to the market.

CEO Commentary

CEO George Kurian emphasized NetApp’s 3% year-over-year revenue growth, driven by all-flash and public cloud solutions. He highlighted AI innovations like AFX and AIDE as key differentiators, along with 200 AI deals closed in Q2. Kurian expressed confidence in overcoming U.S. public sector challenges and expanding AI adoption globally.

Guidance

NetApp raised FY2026 revenue guidance to $6.625–$6.875 billion and EPS to $7.75–$8.05, reflecting optimism about AI and cloud growth. Q3 revenue is expected at $1.69 billion, with gross margins projected at 71.7%–72.7%. The company anticipates sustained cloud revenue growth but remains cautious about short-term U.S. public sector headwinds.

Additional News

NetApp announced a $0.52 quarterly dividend, aligning with previous payouts, and launched AI-focused products like AFX and AIDE to enhance hybrid cloud integration. The company also exceeded non-GAAP EPS expectations by $0.17, with revenue surpassing forecasts by $20 million. Institutional confidence remains strong, though insider selling activity has raised some concerns.