Q1 revenue up 30% to record $2.03B, full-year raised by $650M
NetApp reported strong FQ1 beats and dramatically raised its full-year guidance, citing a 'structural improvement' in demand driven by AI and broad digitalization. While management cautioned on component costs and extra-week distortions, they reported pricing power and a robust demand environment, particularly in All-Flash and Hybrid-Flash storage. FQ1 revenue was $2.03B (+30% YoY), with All-FlashArray growing 47% YoY and public cloud revenue up 28% YoY. EPS came in at $2.58, a +66% YoY increase, exceeding targets.
Buzzberg readQ1 revenue up 30% to record $2.03B, full-year raised by $650MNetApp reported strong FQ1 beats and dramatically raised its full-year guidance, citing a 'structural improvement' in demand driven by AI and broad digitalization. While management cautioned on component costs and extra-week distortions, they reported pricing power and a robust demand environment, particularly in All-Flash and Hybrid-Flash storage. FQ1 revenue was $2.03B (+30% YoY), with All-FlashArray growing 47% YoY and public cloud revenue up 28% YoY. EPS came in at $2.58, a +66% YoY increase, exceeding targets.Read full analysisCollapse analysis
NetApp reported strong FQ1 beats and dramatically raised its full-year guidance, citing a 'structural improvement' in demand driven by AI and broad digitalization. While management cautioned on component costs and extra-week distortions, they reported pricing power and a robust demand environment, particularly in All-Flash and Hybrid-Flash storage. FQ1 revenue was $2.03B (+30% YoY), with All-FlashArray growing 47% YoY and public cloud revenue up 28% YoY. EPS came in at $2.58, a +66% YoY increase, exceeding targets.
Full-year FY27 revenue and EPS guidance was raised materially: revenue midpoint is now $8.1B (+$650M vs prior guide), with EPS midpoint at $9.88.
Management noted accelerating order intake and pricing power despite a 'challenging component cost environment', citing broad-based demand across geographies and customer types.
AI deals are expanding in size and shifting from proof-of-concept to production deployments: quarterly deal count was ~350, but total value is increasing.
PUBLIC_CLOUD revenue206
reported
Revenue$2.025B
+4% QoQ
EPS$2.58
+6% QoQ
Gross margin70.07%
reported
What changed this quarter
01
Guidance
Q1 revenue up 30% to record $2.03B, full-year raised by $650M
Guidance · revenue to $2.1B
02
AI
AI/data lake deals reached ~350 in Q1, deal sizes increasing
Management reports accelerating AI-driven demand, with 350 AI/data lake deals in Q1, including wins at Samsung, a public sector agency, and an Asian neocloud. AI is positioned as fueling a broad-based modernization of the entire data infrastructure stack, and strategic…
03
Margins
Pricing shows earlier capture though Q1 component headwinds persist
Reported gross margin was 70.07%, reinforcing the quarter's better-than-guided profitability.
04
Demand
All FlashArray revenue up 47% YoY, hybrid flash reaccelerating
Management cites broad-based demand strength across all customer segments, geographies, and workloads. Multi-year agreements, new customer wins, and expansion of existing workloads are highlighted as leading indicators. While acknowledging some accelerated purchases/pricing…
AI, capex & demand read
AI
Platform & monetization
Management reports accelerating AI-driven demand, with 350 AI/data lake deals in Q1, including wins at Samsung, a public sector agency, and an Asian neocloud. AI is positioned as fueling a broad-based modernization of the entire data infrastructure stack, and strategic acquisitions (Datapelago, Jetstream) aim to expand AI and cloud capabilities.
Demand
Bookings & conversion
Management cites broad-based demand strength across all customer segments, geographies, and workloads. Multi-year agreements, new customer wins, and expansion of existing workloads are highlighted as leading indicators. While acknowledging some accelerated purchases/pricing benefits, management emphasizes a clear structural improvement in demand and raises full-year revenue guidance.
Capex
Investment and capacity
No explicit capex guidance or discussion of capital expenditures. Management references investments in AI solutions and strategic acquisitions, but no specific capex figures or directional commentary is provided.
Tone · Upbeat
Management conveys strong confidence, repeatedly highlighting exceptional performance, raising full-year guidance, and emphasizing 'super strong momentum' and a 'clear structural improvement in the underlying demand environment.'
Despite significant price increases from component costs, NetApp observed customers 'leaning in' to refresh and spending on 'non-priority workloads' rather than pulling back, likely driven by AI capex.
“We saw the opposite. We saw much higher than the anticipated strength across all classes of customers... clear structural improvement in the underlying demand environment.”
While company-wide gross margins are declining due to component costs, management explicitly states that product gross margins for FY27 have 'improved' versus prior guidance due to pricing power.
“The revised range primarily reflects a higher expected mix of product revenue compared with our prior guidance. At the same time, our fiscal year 2027 product gross margin expectations have improved slightly.”
… sizes are increasing as customers move from proof of concept to production. Initial wins in prior years are expanding into production-level workloads, reflecting confidence in NetApp's ability to support large-scale AI environments. Our solutions are enabling customers to activate data in place for AI, accelerate time to insight, and achieve real business outcomes, putting NetApp at the center of their AI journeys. Here are a few examples from Q1. We signed a significant agreement with Samsung Electronics to support its EDA environment and AI center of excellence. A public sector organization awarded NetApp a strategic deal to modernize and expand its intelligence capabilities and deliver real-time analytics, leveraging NetApp AFX integrated with NVIDIA SuperPOD. AFX's disaggregated architecture provides the flexibility and performance required for advanced AI workloads and provides a future-ready foundation delivering the power and scalability needed to meet evolving requirements as data demands grow. NetApp secured a significant win with an Asian neocloud provider, supplying high availability, secure and scalable storage for new customer-facing AI services. Our robust …
NetApp's AFX is winning AI infrastructure deals by being NVIDIA SuperPOD certified, which bodes well for the continued adoption of its high-end storage within AI GPU clusters.
“A public sector organization awarded NetApp a strategic deal to modernize and expand its intelligence capabilities and deliver real-time analytics, leveraging NetApp AFX integrated with NVIDIA SuperPOD.”
… confidence in NetApp's ability to support large-scale AI environments. Our solutions are enabling customers to activate data in place for AI, accelerate time to insight, and achieve real business outcomes, putting NetApp at the center of their AI journeys. Here are a few examples from Q1. We signed a significant agreement with Samsung Electronics to support its EDA environment and AI center of excellence. A public sector organization awarded NetApp a strategic deal to modernize and expand its intelligence capabilities and deliver real-time analytics, leveraging NetApp AFX integrated with NVIDIA SuperPOD. AFX's disaggregated architecture provides the flexibility and performance required for advanced AI workloads and provides a future-ready foundation delivering the power and scalability needed to meet evolving requirements as data demands grow. NetApp secured a significant win with an Asian neocloud provider, supplying high availability, secure and scalable storage for new customer-facing AI services. Our robust multi-tenancy and deep expertise in large-scale Kubernetes and OpenStack environments set us apart, helping the provider to modernize its infrastructure and …
The NetApp/AWS partnership (FSXN) is a key driver for expanding their customer base to new logos within the VMware-to-AWS migration wave.
“A U.S. hospitality company adopted NetApp technology for the first time through Amazon FSX for NetApp OnTap, supporting its large-scale VMware migration to AWS.”
… adoption of our first-party and marketplace storage services, Q1 public cloud revenue grew to $206 million, up 28% year over year, and up 19% adjusting for the extra week. Customers choose NetApp for our secure, scalable cloud-native storage services as they migrate workloads to the cloud. VMware workloads in particular are among those increasingly being moved to the cloud, opening significant opportunities for NetApp. In Q1, a U.S. hospitality company adopted NetApp technology for the first time through Amazon FSX for NetApp OnTap, supporting its large-scale VMware migration to AWS. FSXN delivered superior performance, lower costs, and versatile workload support. Similarly, a US public sector organization selected Azure NetApp Files as a part of its data modernization efforts. ANF overcame technical barriers found in other cloud services and enabled substantial cost savings. These wins highlight how NetApp's differentiated cloud storage solutions facilitate seamless, efficient VMware migrations, reinforcing our ability to drive sustained growth as organizations accelerate their cloud adoption. All FlashArray revenue reached $1.31 billion in Q1, up 47% year over year. …
The Jetstream acquisition strengthens the NetApp relationship with Azure (MSFT) by positioning NetApp as the 'recovery destination of choice' for non-NetApp VMware environments.
“Jetstream enables continuous protection and recovery of VMware workloads across diverse storage environments with seamless replication to NetApp cloud offerings like Azure NetApp Files.”
… fresh opportunities to accelerate their AI initiatives and maximize the potential of their existing data assets. This positions NetApp as the company that makes zero copy activation of enterprise data for AI real. helping customers drive AI initiatives, improve efficiency, and unlock more value from their data. At the start of Q2, we acquired Jetstream, a leader in cloud-native disaster recovery for VMware environments. Jetstream enables continuous protection and recovery of VMware workloads across diverse storage environments with seamless replication to NetApp cloud offerings like Azure NetApp Files. This acquisition will allow us to offer a simpler, more flexible path to cloud modernization and positions NetApp as the recovery destination of choice for VMware deployments even when production data originates from competitors' infrastructure. NetApp's strong Q1 results underscore our leadership in a transformative era shaped by accelerating AI and cloud adoption. The strength and flexibility of the NetApp platform allow us to support a diverse and growing customer base by winning new business, Deepening partnerships and investing in innovation, we are building a durable …
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