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FY2026 Q3
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NetApp, Inc. earnings call
Buzzberg read
AI customer wins accelerating to ~300 in Q3
NetApp delivered a strong Q3 with revenue and EPS beating expectations. Management guided Q4 revenue inline but EPS above consensus, while noting significant price increases for memory. The AI portfolio is seeing early traction, with AFX off to a strong start and AIDE launching next quarter. The company is navigating memory cost inflation through pricing, supplier management, and product mix shifts. Q3 revenue of $1.71B (+4% YoY; +6% ex-Spot), EPS $2.12 (+11% YoY), record operating income.
Buzzberg read AI customer wins accelerating to ~300 in Q3 NetApp delivered a strong Q3 with revenue and EPS beating expectations. Management guided Q4 revenue inline but EPS above consensus, while noting significant price increases for memory. The AI portfolio is seeing early traction, with AFX off to a strong start and AIDE launching next quarter. The company is navigating memory cost inflation through pricing, supplier management, and product mix shifts. Q3 revenue of $1.71B (+4% YoY; +6% ex-Spot), EPS $2.12 (+11% YoY), record operating income. Read full analysisCollapse analysis
NetApp delivered a strong Q3 with revenue and EPS beating expectations. Management guided Q4 revenue inline but EPS above consensus, while noting significant price increases for memory. The AI portfolio is seeing early traction, with AFX off to a strong start and AIDE launching next quarter. The company is navigating memory cost inflation through pricing, supplier management, and product mix shifts. Q3 revenue of $1.71B (+4% YoY; +6% ex-Spot), EPS $2.12 (+11% YoY), record operating income.
- All-flash array revenue hit a record $1.0B, up 11% YoY.
- Public cloud revenue ex-Spot grew 17% YoY; Keystone grew ~65% YoY.
- 300 AI customers signed in Q3, up from 200 in Q2; 60% of AI deals focused on data prep, 40% on production.
HYBRID_CLOUD Revenue$1.54B+1% QoQ
PUBLIC_CLOUD Revenue$0.174BReported
Revenue$1.713B+0% QoQ
EPS$2.12+3% QoQ
6 grounded callouts
What matters now
The highest-signal changes from the call.
AI
AFX gains early wins in first shipping quarter
Pricing
Company raises prices to offset memory inflation
Show 3 more callouts
Growth
Keystone revenue grows ~65% year-over-year
Cloud
Public cloud services growth driven by first-party services
Guidance
Fiscal 2026 guidance raised at midpoint
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| HYBRID_CLOUD Revenue | $1.54B | +1% QoQ |
| PUBLIC_CLOUD Revenue | $0.174B | Reported |
| Revenue | $1.713B | +0% QoQ |
| EPS | $2.12 | +3% QoQ |
| HYBRID_CLOUD Gross margin | 69.6% | Reported |
| PUBLIC_CLOUD Gross margin | 85.1% | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 Q4 | $2.21–$2.31Above consensus | $2.26 | Guided |
| Revenue | FY2026 Q4 | $1.795B–$1.945BIn line with consensus | $1.87B | Maintained |
AI, capex & demand read
Management read
Confident
Management expressed confidence in their strategic position, citing record profitability, strong AI momentum, and ability to navigate memory inflation through pricing and portfolio flexibility.
Management AI read
Management highlighted strong momentum in AI, with ~300 customers selecting NetApp to prepare data for AI and as the storage foundation for AI innovations. They noted early success of the AI-focused AFX product and the upcoming general availability of the AI Data Engine (AIDE), which is expected to drive differentiation and growth.
Investment and capacity
No explicit capital expenditure or capacity investment discussion was provided beyond general operational discipline and investments in key growth areas.
all 7 named companies below
Companiesreturns since call
Partners
Partners
George Kurian
AWS is a key distribution partner; NetApp's FSx for NetApp ONTAP is winning workloads in AWS, indicating strong joint go-to-market traction.
Evidence
“a retailer, after experiencing a ransomware attack, moved off a competitor's infrastructure to the cloud. They chose AWS FSx for NetApp ONTAP for its support of immutable volume copies providing data protection against cyber attacks.”
Partners
George Kurian
Azure NetApp Files is gaining traction with large enterprises migrating to the cloud, which bodes well for Microsoft's cloud platform.
Evidence
“A multinational insurance company aiming to overcome the complexity of its legacy infrastructure and improve agility selected Azure NetApp Files for its proven performance, ease of use, and enterprise-grade reliability.”
Supply chain
Supply chain
George Kurian
NetApp management explicitly notes that its customer purchasing behavior in Q3 and Q4 is not driven by pull-ins ahead of memory price increases, contrary to market speculation. — This suggests that the strength in Q3/Q4 is durable fundamental demand, and memory supply constraints are not causing customers to over-order, reducing future demand risk.
Evidence
“our Q3 results were not a result of pull-ins. And importantly, our Q4 guidance does not rely on pull-ins.”
Supply chain
George Kurian
NetApp's AI deal mix shows 60% of AI business is in data prep/readiness and 40% in production training/inferencing, indicating a meaningful shift from pilots to production workloads. — The shift of AI storage workloads from preparation to production these early stages suggests AI infrastructure investment is progressing past the initial buildout phase.
Evidence
“Within our mix of business this quarter, roughly 60% were still in the data prep, data readiness, data lake models, and 40% were in production training or production inferencing use cases.”
External signals
Supply-chain alpha · 2returns since call
NetApp management explicitly notes that its customer purchasing behavior in Q3 and Q4 is not driven by pull-ins ahead of memory price increases, contrary to market speculation.
NetApp's AI deal mix shows 60% of AI business is in data prep/readiness and 40% in production training/inferencing, indicating a meaningful shift from pilots to production workloads.
Methodology & coverage
Management-only analysis. All 7 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.