NetApp Q2 2026 Earnings Beats Expectations with 4.1% EPS Growth

NetApp (NTAP) reported fiscal 2026 Q2 earnings on Nov 25, 2025, delivering results that exceeded expectations. The company’s revenue rose 2.8% year-over-year to $1.71 billion, while non-GAAP EPS hit $2.05, surpassing forecasts by $0.17. NetApp also raised full-year 2026 revenue guidance to $6.625–$6.875 billion, reflecting confidence in sustained growth driven by AI and cloud demand.

Revenue

NetApp’s total revenue grew to $1.71 billion in Q2 2026, a 2.8% increase from $1.66 billion in the prior year. Product revenue stood at $788 million, while support services contributed $647 million. Professional and other services generated $99 million, and public cloud revenue reached $171 million. The company emphasized that 70% of its revenue now comes from high-margin all-flash and public cloud segments, underscoring its strategic shift toward AI and hybrid cloud solutions.

Earnings/Net Income

NetApp’s earnings per share (EPS) rose 4.1% to $1.53 in Q2 2026, driven by a 2.0% increase in net income to $305 million. The EPS growth highlights the company’s operational discipline and strong demand for AI infrastructure, all-flash arrays, and hybrid cloud services. This performance positions NetApp for continued profitability as it expands its market share in high-growth technology sectors.

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 resulted in 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 suggest a low-risk profile but modest returns relative to the market.

CEO Commentary

CEO George Kurian highlighted Q2’s 3% revenue growth (4% excluding the divested Spot business), driven by 70% revenue from all-flash and public cloud segments. He credited record gross margins, operating margins, and EPS to operational efficiency and AI demand. Strategic priorities include advancing AFX and AIDE platforms, expanding public cloud integrations, and addressing cyber resilience challenges. Kurian expressed optimism about outgrowing the market despite macroeconomic uncertainties.

Guidance

NetApp raised full-year 2026 revenue guidance to $6.625–$6.875 billion (3% YoY growth at midpoint) and EPS to $7.75–$8.05. Q3 revenue is projected at $1.69 billion ±$75 million, with gross margin of 72.3%–73.3%, operating margin of 30.5%–31.5%, and EPS of $2.01–$2.11. The company anticipates continued strength in cloud services (32% YoY growth) and all-flash revenue (9% YoY growth), while acknowledging temporary U.S. public sector headwinds.

Additional News

NetApp’s Swiss National Bank increased its stake by 9% in Q2, acquiring 51,400 shares to hold 0.31% of the company. The firm’s Q2 EPS of $1.19 initially missed expectations, but the company revised its FY2026 guidance to $7.60–$7.90 EPS. Additionally, NetApp announced a quarterly dividend of $0.52 per share, reflecting a 1.9% yield. Insider activity, however, included six selling transactions in the past three months, raising investor scrutiny.