NetApp Inc. reported its second‑quarter fiscal 2026 results, posting net revenue of $1.71 billion—up 3 % year‑over‑year from $1.66 billion in Q2 FY2025—and a non‑GAAP earnings per share of $2.05, beating the consensus estimate of $1.89 by $0.16 (an 8.5 % beat). The company’s Q2 FY2025 revenue of $1.66 billion and EPS of $1.87 provide a clear baseline for the year‑over‑year growth shown in the current quarter.
All‑flash array revenue reached $1.00 billion, a 9 % increase, while public‑cloud revenue climbed 32 % to $171 million. These high‑margin segments accounted for roughly 70 % of total revenue, underscoring the company’s successful shift toward AI‑ready, cloud‑centric solutions that drive both top‑line growth and pricing power.
NetApp’s non‑GAAP operating margin expanded to 31.1 %, and its gross margin rose to 72.6 %, both record levels. The margin lift is largely attributable to the favorable product mix—higher‑margin all‑flash and public‑cloud contracts—and disciplined cost management that offset modest increases in support and infrastructure expenses.
The quarter also saw the closing of about 200 AI infrastructure and data‑lake modernization deals, a key driver of the robust demand for NetApp’s AI‑ready platform. These deals reinforce the company’s positioning in the high‑growth AI market and contribute to the revenue and margin gains reported.
Management raised its full‑year fiscal 2026 EPS guidance to $7.75–$8.05, an upward revision from the prior range, while maintaining the revenue guidance of $6.625–$6.875 billion. The EPS upgrade signals strong confidence in continued demand for AI and cloud services, as well as the effectiveness of the company’s cost‑control initiatives.
CEO George Kurian highlighted the quarter’s performance, stating, “Through strong execution and operational discipline, we delivered an outstanding second quarter with revenue growth driven by strong demand for our AI solutions, first‑party and marketplace cloud storage services, and all‑flash offerings.” He added that “All‑Flash and Public Cloud, which address growth markets and carry higher gross margins, made up 70 % of Q2 revenue.”
Investors responded positively to the earnings, with the EPS and revenue beats, the record margin expansion, and the raised full‑year guidance reinforcing confidence in NetApp’s AI and cloud strategy. The market reaction reflects the company’s ability to convert high‑margin demand into earnings growth while maintaining a forward‑looking outlook.
While the company noted continued caution regarding the U.S. public‑sector market, the overall tailwinds from AI and cloud demand, coupled with the company’s competitive advantages in integrated data‑platform solutions, suggest a resilient growth trajectory for the remainder of fiscal 2026.
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