Exhibit 99.1 NetApp Reports First Quarter of Fiscal Year 2027 Results Delivers
Exhibit 99.1 NetApp Reports First Quarter of Fiscal Year 2027 Results Delivers record quarterly net revenues of $2.03 billion, an increase of 30% year-over- year; First quarter GAAP earnings per share of $1.88; record non-GAAP earnings per share of $2.58; Significantly raised fiscal year 2027 revenue and earnings per share guidance News Summary • Record all-flash array net revenue of $1.3 billion for the first quarter of fiscal year 2027, an increase of 47% year-over- year • Record Public Cloud net revenue of $206 million for the first quarter of fiscal year 2027, an increase of 28% year-over-year • Billings of $2.06 billion for the first quarter of fiscal year 2027, an increase of 36% year-over-year • First quarter GAAP operating margin of 23.9%; first quarter non-GAAP operating margin of 31.9% • Acquired DataPelago, Inc., an AI data infrastructure company, to help customers simplify and accelerate AI deployment at scale SAN JOSE, Calif.—September 2, 2026— NetApp (NASDAQ: NTAP), the Intelligent Data Infrastructure company, today reported financial results for the first quarter of fiscal year 2027, which ended on July 31, 2026. “NetApp delivered a record- setting start to the year, exceeding guidance on every metric and achieving our strongest first quarter ever,” said George Kurian, Chief Executive Officer. “Our momentum reflects not only the trust of existing customers but also our success in winning new ones, as organizations choose the NetApp Platform to power their AI and hybrid multi-cloud initiatives. Through continued innovation and strategic investments, we are enabling customers to address their most critical needs and creating lasting value for all stakeholders.” First Quarter of Fiscal Year 2027 Financial Results ($ in millions, except earnings per share)
The Company provided the following financial guidance for the second quarter of fiscal year 2027: Net revenues are expected to $2.025 billion - $2.175 be in the billion range of: GAAP Non-GAAP Consolidated gross margins are expected 66.0% - 67.0% 67.0% - 68.0% to be in the range of: Operating margins are expected to be in 24.9% - 25.9% 30.9% - 31.9% the range of: Earnings per share is expected to be in $1.97 - $2.07 $2.54 - $2.64 the range of:
The Company provided the following financial guidance for the full fiscal year 2027: Net revenues are expected to $7.975 billion - $8.225 be in the billion range of: GAAP Non-GAAP Consolidated gross margins are expected 67.1% - 68.1% 68.1% - 69.1% to be in the range of: Operating margins are expected to be in 24.3% - 25.3% 30.3% - 31.3% the range of: Earnings per share is expected to be in $7.35 - $7.65 $9.73 - $10.03 the range of:
Dividend The next cash dividend of $0.52 per share is to be paid on October 28, 2026, to stockholders of record as of the close of business on October 9, 2026. First Quarter of Fiscal Year 2027 Business Highlights
NetApp announced the release of StorageGRID 12.1 , designed to help customers scale AI and other modern workloads with a federated global namespace, improving how data is accessed, processed, and managed across distributed environments to support AI data pipelines.
NetApp announced new capabilities to NetApp Trident software 26.06 that helps Kubernetes platform teams scale workloads, while adding smarter volume placement, non-disruptive iSCSI volume rebalancing, expanded cloud support, and deeper integration for OpenShift Virtualization migrations.
NetApp announced new data management capabilities optimized for Red Hat OpenShift that enable advanced levels of resilience and scale for virtualized environments, on-premises and in the cloud.
NetApp announced Instaclustr for Model Context Protocol (MCP) Gateway , a fully managed gateway service that connects Instaclustr managed data infrastructure to AI applications and agents.
NetApp announced the general availability of Azure NetApp Files support for large files up to 64 TiB on regular volumes to help remove the friction from large-scale migrations, de-risk VMware estate moves, and allow architects to design cleaner, more cost-effective solutions.
NetApp announced the general availability of Azure NetApp Files Object REST API to eliminate complex data pipelines and enable direct access to AI capabilities through standardized interfaces.
NetApp introduced nconnect on Azure VMware Solution , increasing throughput and lowering effective latency under load without adding datastores or hosts.
NetApp announced the general availability of Azure NetApp Files migration assistant to accelerate and simplify migrations of business-critical applications and data to Azure.
NetApp announced a collaboration with Cisco to offer new solutions for secure, scalable, and simplified AI, expanding on the success of FlexPod to support AI adoption across organizations.
NetApp announced an expanded collaboration with Cisco to strengthen defense-in- depth strategies for customers with the new NetApp Splunk Security Orchestration, Automation, and Response (SOAR) playbook.
NetApp announced a deepened global alliance with CGI where NetApp Keystone will power CGI’s block storage solutions within its shared services platform.
NetApp and SK Telecom announced the completion of a joint proof of concept, using NetApp AFX systems with SK Telecom’s Petasus AI Cloud, demonstrating a solution that enables enterprises to scale AI infrastructure in virtualized environments while maintaining high performance.
NetApp and Okestro signed a strategic partnership agreement to jointly develop integrated enterprise AI and disaster recovery infrastructure.
NetApp announced a strategic partnership with Tata Consultancy Services to better help organizations discover, classify, and govern data across locations, reduce the impact of cyber-attacks, speed up recovery times, and provide insights on sensitive data locations and permissions.
NetApp announced its acquisition of DataPelago, Inc., to further enable computing where data is created and stored, accelerating demanding workloads while improving infrastructure efficiency at scale.
NetApp appointed Alvaro Celis as Chief Partner and Ecosystem Officer to lead partner ecosystems, modernize incentive programs, improve partner satisfaction, and drive growth.
NetApp CEO, George Kurian, was named to CRN ’s 25 Most Influential Executives of 2026 list , emphasizing his leadership in data storage amid the age of cloud and AI.
NetApp’s AI Data Engine was named as a finalist in CRN ’s 2026 Tech Innovator Awards , noting its ability to transform massive unstructured data estates into always-fresh, AI-ready assets with enterprise-grade security, compliance, and operational efficiency.
NetApp was named a Leader in the Forrester Wave TM : Object Storage Solutions, Q2 2026 , showcasing our strong fit for large enterprises managing distributed, regulated object estates that want to balance governance and hybrid consistency against the need for AI-native storage services.
NetApp was recognized in The Wall Street Journal ’s 2026 Best Companies For The Future list , ranking 60 out of 500 organizations.
NetApp was named as one of the Greatest Workplaces in America, California, and Tech for 2026 by Newsweek , receiving a five-star rating based on a comprehensive worker satisfaction study.
NetApp was named to Time Magazine ’s Best Companies of 2026 list, ranking 271 out of 1,000 organizations.
NetApp was named as one of the Best Companies to Work For by U.S. News , highlighting its top work environment.
NetApp will host a conference call to discuss these results today at 2:30 p.m. Pacific Time. To access the live webcast of this event, go to the NetApp Investor Relations website atinvestors.netapp.com. In addition, this press release and other information related to the call will be posted on the Investor Relations website. An audio replay will be available on the website after 4:30 p.m. Pacific Time today. NetApp uses its website as a tool to disclose important information about NetApp and comply with its disclosure obligations under Regulation Fair Disclosure.
“Safe Harbor” Statement Under U.S. Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, all of the statements made in the Second Quarter of Fiscal Year 2027 Financial Outlook section and the Full Fiscal Year 2027 Financial Outlook section, and statements about our business, economic and market outlook, financial guidance, our overall future prospects, expected benefits from our acquisitions and partnerships, demand for our AI solutions and other offerings, our ability to provide our customers secure, high-performance access to their data, our ability to maintain our operating margins, our ability to sustain growth, our platform and offerings, and our ability to capitalize on opportunities and deliver increasing results and value for our stakeholders.
Actual results may differ materially from these statements for a variety of reasons, including, without limitation, our ability to keep pace with the rapid industry, technological and market trends and changes in the markets in which we operate; our ability to execute our evolved cloud strategy and introduce and gain market acceptance for our products and services; our ability to maintain our customer, partner, supplier and contract manufacturer relationships on favorable terms and conditions; global political, macroeconomic and market conditions, including inflation, fluctuating interest rates, tariffs, changes in trade policy, regulations, monetary policy shifts, recession risks, and foreign exchange volatility and the resulting impact on demand for our products; the impact of new or ongoing geopolitical conflicts and sanctions; adoption or changes to laws, regulations, standards, or policies affecting our operations, products, services, the storage industry, or AI usage; material cybersecurity and other security breaches; the impact of supply chain disruptions on our business operations, financial performance and results of operations; changes and related uncertainty in U.S. government spending or policy, including due to prolonged federal government shutdowns; changes in overall technology spending by our customers; revenue seasonality; changes in laws or regulations, including those relating to privacy, data protection and information security; the timing of orders and their fulfillment; and our ability to manage our gross profit margins, including managing component costs. These and other equally important factors are described in reports and documents we file from time to time with the Securities and Exchange Commission, including the factors described under the sections titled “Risk Factors” in our most recently filed annual report on Form 10-K and quarterly report on Form 10-Q. All statements made in this release are made only as of the date set forth at the beginning of this release. We disclaim any obligation to update information contained in this press release, whether as a result of new information, future events, or otherwise.
To supplement NetApp’s condensed consolidated financial statement information presented in accordance with generally accepted accounting principles in the United States (GAAP), NetApp provides investors with certain non-GAAP measures, including, but not limited to, historical non-GAAP gross margins, non-GAAP gross profit, non-GAAP operating income, non-GAAP operating margins, non-GAAP net income, non-GAAP effective tax rate, free cash flow, billings, and historical and projected non-GAAP earnings per share.
NetApp believes that the presentation of its non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations. Non-GAAP financial measures are used to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results, and (3) allow greater transparency with respect to information used by management in financial and operational decision making.
NetApp believes that the presentation of non-GAAP gross margins, non-GAAP gross profit, non-GAAP operating income, non-GAAP operating margins, non-GAAP effective tax rate, non-GAAP net income, and non-GAAP earnings per share data provides investors with supplemental metrics that assist in understanding current results and future prospects, earnings and profitability that are complementary to GAAP metrics. Each of these non-GAAP metrics is defined as the applicable GAAP metric adjusted to exclude the items defined in A through I below, as applicable, while our non-GAAP effective tax rate and non-GAAP net income also reflect a non-GAAP tax provision, as described in item J below, instead of our GAAP tax provision. GAAP earnings per share and non-GAAP earnings per share are calculated using the net income divided by the diluted number of shares for the applicable period.
NetApp believes that the presentation of free cash flow, which it defines as the net cash provided by operating activities less cash used to acquire property and equipment, to be a liquidity measure that provides useful information to investors and management because it reflects cash that can be used to, among other things, invest in its business, make strategic acquisitions, repurchase common stock, and pay dividends on its common stock. As free cash flow is not a measure of liquidity calculated in accordance with GAAP, free cash flow should be considered in addition to, but not as a substitute for, the analysis provided in the statement of cash flows.
NetApp approximates billings by adding net revenues as reported on our Condensed Consolidated Statements of Operations for the period to the change in total deferred revenue as reported on our Condensed Consolidated Statements of Cash Flows for the same period. Billings is a performance measure that NetApp believes provides useful information to investors and management because it approximates the amounts under purchase orders received by us during a given period that have been billed.
A. Amortization of intangible assets. NetApp records amortization of intangible assets that were acquired in connection with its business combinations. The amortization of intangible assets varies depending on the level of acquisition activity. Management finds it useful to exclude these charges to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods and in measuring operational performance.
B. Stock-based compensation expenses. NetApp excludes stock-based compensation expenses from its non-GAAP measures primarily because the amount can fluctuate based on variables unrelated to the performance of the underlying business. While management views stock-based compensation as a key element of our employee retention and long-term incentives, we do not view it as an expense to be used in evaluating operational performance in any given period.
C. Litigation settlements. NetApp may periodically incur charges or benefits related to litigation settlements. NetApp excludes these charges and benefits, when significant, because it does not believe they are reflective of ongoing business and operating results.
D. Acquisition-related expenses. NetApp excludes acquisition-related expenses, including (a) due diligence, legal and other one-time integration charges and (b) write down of assets acquired that NetApp does not intend to use in its ongoing business, from its non-GAAP measures, primarily because they are not related to our ongoing business or cost base and, therefore, are less useful for future planning and forecasting.
E. Restructuring charges. These charges consist of restructuring charges that are incurred based on the particular facts and circumstances of restructuring decisions, including employment and contractual settlement terms, and other related charges, and can vary in size and frequency. We therefore exclude them in our assessment of operational performance.
F. Asset impairments. These are non-cash charges to write down assets when there is an indication that the asset has become impaired. Management finds it useful to exclude these non-cash charges due to the unpredictability of these events in its assessment of operational performance.
G. Gains/losses on the sale or derecognition of assets. These are gains/losses from the sale of our properties and other transactions in which we transfer and/or lose control of assets to a third party. This is inclusive of third-party advisory, legal and other costs that result directly from and are essential to a sale transaction and that would not have been incurred had the decision to sell not been made. Management believes that these transactions do not reflect the results of our underlying, ongoing business and, therefore, are less useful for future planning and forecasting.
H. Gains/losses on the sale of investments in equity securities. These are gains/losses from the sale of our investment in certain equity securities. Typically, such investments are sold as a result of a change in control of the underlying businesses. Management believes that these transactions do not reflect the results of our underlying, ongoing business and, therefore, are less useful for future planning and forecasting.
I. Debt extinguishment costs. NetApp excludes certain non-recurring expenses incurred as a result of the early extinguishment of debt. Management believes such non-recurring costs do not reflect the results of its underlying, ongoing business and, therefore, are less useful for future planning and forecasting.
J. Income tax effects. NetApp’s non-GAAP tax provision is based upon a projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. The non-GAAP tax provision also excludes, when applicable, (a) tax charges or benefits in the current period that relate to one or more prior fiscal periods that are a result of events such as changes in tax legislation, authoritative guidance, income tax audit settlements, statute lapses and/or court decisions, (b) tax charges or benefits that are attributable to unusual or non-recurring book and/or tax accounting method changes, (c) tax charges or benefits that are a result of a non-routine foreign cash repatriation, (d) tax charges or benefits that are a result of infrequent restructuring of the Company’s tax structure, (e) tax charges or benefits that are a result of a change in valuation allowance, and (f) tax charges or benefits resulting from the integration of intellectual property from acquisitions. Management believes that the use of non-GAAP tax provisions provides a more meaningful measure of the Company’s operational performance.
Non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, non-GAAP measures are not based on any comprehensive set of accounting rules or principles. NetApp believes that non- GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. NetApp management compensates for these limitations by analyzing current and projected results on a GAAP basis as well as a non-GAAP basis. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. A detailed reconciliation of our non-GAAP to GAAP results can be found herein. In the press release and accompanying financial statements and reconciliations, the terms "operating income" and "income from operations" are used interchangeably. Similarly, "earnings per share" and "net income per share" are also used interchangeably.
In periods in which the impacts of foreign currency exchange rate changes are significant, NetApp presents certain constant currency growth rates or quantifies the impact of foreign currency exchange rate changes on year-over- year fluctuations, including for net revenues, billings, and earnings. This constant currency information assumes that the same foreign currency exchange rates that were in effect for the comparable prior-year period were used in translation of the current period results.
For more than three decades, NetApp has helped the world’s leading organizations navigate change – from the rise of enterprise storage to the intelligent era defined by data and AI. Today, NetApp is the Intelligent Data Infrastructure company, helping customers turn data into a catalyst for innovation, resilience, and growth.
At the heart of that infrastructure is the NetApp data platform – the unified, enterprise-grade, intelligent foundation that connects, protects, and activates data across every cloud, workload, and environment. Built on the proven power of NetApp ONTAP, our leading data management software and OS, and enhanced by automation through the AI Data Engine and AFX, it delivers observability, resilience, and intelligence at scale.
Disaggregated by design, the NetApp data platform separates storage, services, and control so enterprises can modernize faster, scale efficiently, and innovate without lock-in. As the only enterprise storage platform natively embedded in the world’s largest clouds, it gives organizations the freedom to run any workload anywhere with consistent performance, governance, and protection.
With NetApp, data is always ready – ready to defend against threats, ready to power AI, and ready to drive the next breakthrough. That’s why the world’s most forward-thinking enterprises trust NetApp to turn intelligence into advantage.
NetApp, the NetApp logo, and the marks listed at http://www.netapp.com/TM are trademarks of NetApp, Inc. All other marks are the property of their respective owners. NETAPP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ($ in millions) (Unaudited)
July 31, 2026 April 24, 2026 ────────────────────────────────────────────────────────────────────────────── ASSETS Current assets: Cash, cash equivalents and $ 3,576 $ 3,584 investments Accounts receivable 966 1,286 Inventories 375 198 Other current assets 755 708 Total current assets 5,672 5,776 Property and equipment, net 663 592 Goodwill and purchased intangible 2,954 2,794 assets, net Other non-current assets 1,666 1,582 Total assets $ 10,955 $ 10,744 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 566 $ 550 Accrued expenses 1,200 1,151 Current portion of long-term debt 550 — Short-term deferred revenue 2,252 2,320 Total current liabilities 4,568 4,021 Long-term debt 1,938 2,487 Other long-term liabilities 360 360 Long-term deferred revenue 2,594 2,525 Total liabilities 9,460 9,393 Stockholders' equity 1,495 1,351 Total liabilities and stockholders' $ 10,955 $ 10,744 equity
NETAPP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ($ in millions, except net income per share amounts) (Unaudited)
Three Months Ended July 31, 2026 July 25, 2025 ────────────────────────────────────────────────────────────────────────────── Revenues: Product $ 987 $ 654 Services 1,038 905 Net revenues 2,025 1,559 Cost of revenues: Cost of product 450 302 Cost of services 156 159 Total cost of 606 461 revenues Gross profit 1,419 1,098 Operating expenses: Sales and 507 461 marketing Research and 274 242 development General and 98 84 administrative Restructuring 56 2 charges Total operating 935 789 expenses Income from 484 309 operations Other expense, — (5 ) net Income before 484 304 income taxes Provision for 109 71 income taxes Net income $ 375 $ 233 Net income per share: Basic $ 1.91 $ 1.16 Diluted $ 1.88 $ 1.15 Shares used in net income per share calculations: Basic 196 201 Diluted 200 203
Three Months Ended July 31, 2026 July 25, 2025 ────────────────────────────────────────────────────────────────────────────── Cash flows from operating activities: Net income $ 375 $ 233 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and 33 51 amortization Non-cash operating lease 11 11 cost Stock-based 98 83 compensation Deferred income (5 ) 9 taxes Other items, (15 ) 46 net Changes in assets and liabilities: Accounts 317 466 receivable Inventories (176 ) 54 Accounts 19 (107 ) payable Accrued (75 ) (240 ) expenses Deferred 32 (48 ) revenue Changes in other operating assets and (111 ) 115 liabilities, net Net cash provided by 503 673 operating activities Cash flows from investing activities: Purchases of investments, (494 ) (143 ) net Purchases of property and (102 ) (53 ) equipment Acquisition of business, net (78 ) — of cash acquired Other investing — 15 activities, net Net cash used in investing (674 ) (181 ) activities Cash flows from financing activities: Proceeds from issuance of common stock 57 54 under employee stock award plans Payments for taxes related to net share (74 ) (57 ) settlement of stock awards Repurchase of (200 ) (300 ) common stock Repayments and extinguishment — (750 ) of debt Dividends paid (102 ) (104 ) Net cash used in financing (319 ) (1,157 ) activities Effect of exchange rate changes on cash, (6 ) 7 cash equivalents and restricted cash Net change in cash, cash (496 ) (658 ) equivalents and restricted cash Cash, cash equivalents and restricted cash:
NETAPP, INC. RECONCILIATION OF GAAP TO NON-GAAP INCOME STATEMENT INFORMATION ($ in millions) Q1 FY27 Q1 FY26 ────────────────────────────────────────────────────────────────────── NET INCOME $ 375 $ 233 Adjustments: Amortization of intangible assets 6 6 Stock-based compensation 98 83 Restructuring charges 56 2 Acquisition-related expense 1 — Gains/losses on the sale or — 1 derecognition of assets Income tax effects (21 ) (11 ) NON-GAAP NET INCOME $ 515 $ 314 COST OF REVENUES $ 606 $ 461 Adjustments: Amortization of intangible assets (3 ) (3 ) Stock-based compensation (7 ) (7 ) NON-GAAP COST OF REVENUES $ 596 $ 451 COST OF PRODUCT REVENUES $ 450 $ 302 Adjustments: Stock-based compensation (2 ) (1 ) NON-GAAP COST OF PRODUCT REVENUES $ 448 $ 301 COST OF SERVICES REVENUES $ 156 $ 159 Adjustments: Amortization of intangible assets (3 ) (3 ) Stock-based compensation (5 ) (6 ) NON-GAAP COST OF SERVICES REVENUES $ 148 $ 150 GROSS PROFIT $ 1,419 $ 1,098 Adjustments: Amortization of intangible assets 3 3 Stock-based compensation 7 7 NON-GAAP GROSS PROFIT $ 1,429 $ 1,108
NETAPP, INC. RECONCILIATION OF GAAP TO NON-GAAP INCOME STATEMENT INFORMATION ($ in millions) Q1 FY27 Q1 FY26 ───────────────────────────────────────────────────────────────────────── SALES AND MARKETING EXPENSES $ 507 $ 461 Adjustments: Amortization of intangible assets (3 ) (3 ) Stock-based compensation (40 ) (34 ) NON-GAAP SALES AND MARKETING EXPENSES $ 464 $ 424 RESEARCH AND DEVELOPMENT EXPENSES $ 274 $ 242 Adjustments: Stock-based compensation (35 ) (25 ) NON-GAAP RESEARCH AND DEVELOPMENT $ 239 $ 217 EXPENSES GENERAL AND ADMINISTRATIVE EXPENSES $ 98 $ 84 Adjustments: Stock-based compensation (16 ) (17 ) Acquisition-related expense (1 ) — Gains/losses on the sale or — (1 ) derecognition of assets NON-GAAP GENERAL AND ADMINISTRATIVE $ 81 $ 66 EXPENSES RESTRUCTURING CHARGES $ 56 $ 2 Adjustments: Restructuring charges (56 ) (2 ) NON-GAAP RESTRUCTURING CHARGES $ — $ — OPERATING EXPENSES $ 935 $ 789 Adjustments: Amortization of intangible assets (3 ) (3 ) Stock-based compensation (91 ) (76 ) Restructuring charges (56 ) (2 ) Acquisition-related expense (1 ) — Gains/losses on the sale or — (1 ) derecognition of assets NON-GAAP OPERATING EXPENSES $ 784 $ 707
NETAPP, INC. RECONCILIATION OF GAAP TO NON-GAAP INCOME STATEMENT INFORMATION ($ in millions, except net income per share) Q1 FY27 Q1 FY26 ────────────────────────────────────────────────────────────────────────────── INCOME FROM OPERATIONS $ 484 $ 309 Adjustments: Amortization of intangible assets 6 6 Stock-based compensation 98 83 Restructuring charges 56 2 Acquisition-related expense 1 — Gains/losses on the sale or — 1 derecognition of assets NON-GAAP INCOME FROM OPERATIONS $ 645 $ 401 INCOME BEFORE INCOME TAXES $ 484 $ 304 Adjustments: Amortization of intangible assets 6 6 Stock-based compensation 98 83 Restructuring charges 56 2 Acquisition-related expense 1 — Gains/losses on the sale or — 1 derecognition of assets NON-GAAP INCOME BEFORE INCOME TAXES $ 645 $ 396 PROVISION FOR INCOME TAXES $ 109 $ 71 Adjustments: Income tax effects 21 11 NON-GAAP PROVISION FOR INCOME TAXES $ 130 $ 82 NET INCOME PER SHARE $ 1.88 $ 1.15 Adjustments: Amortization of intangible assets 0.03 0.03 Stock-based compensation 0.49 0.41 Restructuring charges 0.28 0.01 Acquisition-related expense 0.01 — Income tax effects (0.11 ) (0.05 ) NON-GAAP NET INCOME PER SHARE $ 2.58 $ 1.55
RECONCILIATION OF GAAP TO NON-GAAP GROSS MARGIN ($ in millions) Gross margin Cost of revenues adjustments 70.1 70.4 Non-GAAP Gross margin 0.5 % 0.7 % Cost of revenues 70.6 % 71.1 % Cost of revenues adjustments: 606 % 461 % Amortization of intangible assets (3 ) (3 ) Stock-based compensation Q1 FY27 (7 ) Q1 FY26 (7 ) ────────────────────────────────────────────────────────────────────────────── Non-GAAP Cost of revenues $ 596 $ 451 Net revenues $ 2,025 $ 1,559
RECONCILIATION OF GAAP TO NON-GAAP PRODUCT GROSS MARGIN ($ in millions) Product gross margin Cost of product revenues adjustments Non-GAAP Product gross margin 54.4 53.8 Cost of product revenues 0.2 % 0.2 % Cost of product revenues 54.6 % 54.0 % adjustments: 450 % 302 % Stock-based compensation Q1 FY27 (2 ) Q1 FY26 (1 ) ────────────────────────────────────────────────────────────────────────────── Non-GAAP Cost of product revenues $ 448 $ 301 Product revenues $ 987 $ 654
RECONCILIATION OF GAAP TO NON-GAAP SERVICES GROSS MARGIN ($ in millions) Services gross margin Cost of services revenues adjustments Non-GAAP Services gross margin 85.0 82.4 Cost of services revenues 0.7 % 1.0 % Cost of services revenues 85.7 % 83.4 % adjustments: 156 % 159 % Amortization of intangible assets (3 ) (3 ) Stock-based compensation Q1 FY27 (5 ) Q1 FY26 (6 ) ────────────────────────────────────────────────────────────────────────────── Non-GAAP Cost of services revenues $ 148 $ 150 Services revenues $ 1,038 $ 905
RECONCILIATION OF GAAP TO NON-GAAP OPERATING MARGIN ($ in millions) Q1 FY27 Q1 FY26 Operating margin 23.9 % 19.8 % Adjustments 8.0 % 5.9 % Non-GAAP Operating margin 31.9 % 25.7 % Income from operations $ 484 $ 309 Income from operations adjustments: Amortization of intangible assets 6 6 Stock-based compensation 98 83 Restructuring charges 56 2 Acquisition-related expense 1 — Gains/losses on the sale or — 1 derecognition of assets Non-GAAP Income from operations $ 645 $ 401 Net revenues $ 2,025 $ 1,559
RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE TAX RATE Q1 FY27 Q1 FY26 Effective tax rate 22.5 % 23.4 % Adjustments: Income tax effects (2.3 )% (2.7 )% Non-GAAP Effective tax rate 20.2 % 20.7 %
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (NON-GAAP) ($ in millions) Q1 FY27 Q1 FY26 ────────────────────────────────────────────────────────────────────────────── Net cash provided by operating $ 503 $ 673 activities Purchases of property and equipment (102 ) (53 ) Free cash flow $ 401 $ 620
RECONCILIATION OF NET REVENUES TO BILLINGS (NON-GAAP) ($ in millions) Q1 FY27 Q1 FY26 ────────────────────────────────────────────────────────────────────── Net revenues $ 2,025 $ 1,559 Change in deferred revenue* 32 (48 ) Billings $ 2,057 $ 1,511 * As reported on our Condensed Consolidated Statements of Cash Flows
NETAPP, INC. SUPPLEMENTAL DATA ($ in millions, except net income per share, DSO, DPO, and Inventory Turns) (Unaudited) Revenues by Segment Q1 FY27 Q1 FY26 ────────────────────────────────────────────────────────────────────────────── Product $ 987 $ 654 Support 720 647 Professional and Other 112 97 Services Hybrid Cloud Segment Net 1,819 1,398 Revenues Public Cloud Segment Net 206 161 Revenues Net Revenues $ 2,025 $ 1,559 Hybrid Cloud Segment Net Revenues by Storage Category Q1 FY27 Q1 FY26 All-flash revenues $ 1,309 $ 893 Hybrid-flash and other 510 505 revenues Hybrid Cloud Segment Net $ 1,819 $ 1,398 Revenues Gross Profit by Segment Q1 FY27 Q1 FY26 Product $ 539 $ 353 Support 671 597 Professional and Other 41 29 Services Hybrid Cloud Segment Gross 1,251 979 Profit Public Cloud Segment Gross 178 129 Profit Total Segments Gross Profit 1,429 1,108 Amortization of Intangible (3 ) (3 ) Assets Stock-based Compensation (7 ) (7 ) Unallocated Cost of Revenues (10 ) (10 ) Gross Profit $ 1,419 $ 1,098 Gross Margin by Segment Q1 FY27 Q1 FY26 Product 54.6 % 54.0 % Support 93.2 % 92.3 % Professional and Other 36.6 % 29.9 % Services Hybrid Cloud Segment Gross 68.8 % 70.0 % Margin Public Cloud Segment Gross 86.4 % 80.1 % Margin
NETAPP, INC. SUPPLEMENTAL DATA ($ in millions, except net income per share, DSO, DPO, and Inventory Turns) (Unaudited) Net Revenues by Geographic Area Q1 FY27 Q1 FY26 Americas 48 % 51 % Americas Commercial 37 % 40 % U.S. Public Sector* 11 % 11 % EMEA 33 % 32 % Asia Pacific 19 % 17 % * U.S. Public Sector includes revenue from both the U.S. federal government and U.S. state governments, local municipalities and education institutions.
Non-GAAP Income from Operations, Income before Income Taxes & Effective Tax Rate Q1 FY27 Q1 FY26 ────────────────────────────────────────────────────────────────────────────── Non-GAAP Income from $ 645 $ 401 Operations Operating Margin 31.9 % 25.7 % Non-GAAP Income before Income $ 645 $ 396 Taxes Non-GAAP Effective Tax Rate 20.2 % 20.7 % Non-GAAP Net Income Q1 FY27 Q1 FY26 Non-GAAP Net Income $ 515 $ 314 Non-GAAP Weighted Average Common Shares 200 203 Outstanding, Diluted Non-GAAP Net Income per Share, $ 2.58 $ 1.55 Diluted
Select Balance Sheet Items Q1 FY27 Q1 FY26 ────────────────────────────────────────────────────────────────────── Deferred Revenue $ 4,846 $ 4,526 DSO (days) 47 46 DPO (days) 92 80 Inventory Turns 6 14 Days sales outstanding (DSO) is defined as accounts receivable divided by net revenues, multiplied by the number of days in the quarter. Days payables outstanding (DPO) is defined as accounts payable divided by cost of revenues, multiplied by the number of days in the quarter. Inventory turns is defined as annualized cost of revenues divided by net inventories.
Select Cash Flow Statement Items Q1 FY27 Q1 FY26 ──────────────────────────────────────────────────────────────────────────── Net Cash Provided by Operating $ 503 $ 673 Activities Purchases of Property and Equipment $ 102 $ 53 Free Cash Flow $ 401 $ 620 Free Cash Flow Margin 19.8 % 39.8 % Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities less purchases of property and equipment. Free cash flow margin is defined as free cash flow as a percentage of net revenues. Some items may not add or recalculate due to rounding.
NETAPP, INC. RECONCILIATION OF GAAP GUIDANCE TO NON-GAAP SECOND QUARTER FISCAL 2027 Second Quarter Fiscal 2027 GAAP Guidance - Gross Margin 66.0% - 67.0% Adjustments: Cost of revenues adjustments 1% Non-GAAP Guidance - Gross Margin 67.0% - 68.0% Second Quarter Fiscal 2027 GAAP Guidance - Operating Margin 24.9% - 25.9% Adjustments: Stock-based compensation expense 6% Non-GAAP Guidance - Operating Margin 30.9% - 31.9% Some items may not add or recalculate due to rounding.
Second Quarter Fiscal 2027 GAAP Guidance - Net Income Per Share $1.97 - $2.07 Adjustments of Specific Items to Net Income Per Share: Amortization of intangible assets $0.03 Stock-based compensation expense $0.58 Income tax effects -$0.04 Total Adjustments $0.57 Non-GAAP Guidance - Net Income Per Share $2.54 - $2.64 Some items may not add or recalculate due to rounding.
NETAPP, INC. RECONCILIATION OF GAAP GUIDANCE TO NON-GAAP FISCAL 2027 Fiscal 2027 GAAP Guidance - Gross Margin 67.1% - 68.1% Adjustments: Cost of revenues adjustments 1% Non-GAAP Guidance - Gross Margin 68.1% - 69.1% Fiscal 2027 GAAP Guidance - Operating Margin 24.3% - 25.3% Adjustments: Stock-based compensation expense 5% Restructuring charges 1% Non-GAAP Guidance - Operating Margin 30.3% - 31.3% Some items may not add or recalculate due to rounding.
Fiscal 2027 GAAP Guidance - Net Income Per Share $7.35 - $7.65 Adjustments of Specific Items to Net Income Per Share: Amortization of intangible assets $0.12 Stock-based compensation expense $2.19 Restructuring charges $0.28 Acquisition-related expenses $0.01 Income tax effects -$0.22 Total Adjustments $2.38 Non-GAAP Guidance - Net Income Per Share $9.73 - $10.03 Some items may not add or recalculate due to rounding.
Full text with the tables
Exhibit 99.1 NetApp Reports First Quarter of Fiscal Year 2027 Results Delivers
record quarterly net revenues of $2.03 billion, an increase of 30% year-over-
year; First quarter GAAP earnings per share of $1.88; record non-GAAP earnings
per share of $2.58; Significantly raised fiscal year 2027 revenue and earnings
per share guidance News Summary • Record all-flash array net revenue of $1.3
billion for the first quarter of fiscal year 2027, an increase of 47% year-over-
year • Record Public Cloud net revenue of $206 million for the first quarter of
fiscal year 2027, an increase of 28% year-over-year • Billings of $2.06 billion
for the first quarter of fiscal year 2027, an increase of 36% year-over-year •
First quarter GAAP operating margin of 23.9%; first quarter non-GAAP operating
margin of 31.9% • Acquired DataPelago, Inc., an AI data infrastructure company,
to help customers simplify and accelerate AI deployment at scale SAN JOSE,
Calif.—September 2, 2026— NetApp (NASDAQ: NTAP), the Intelligent Data
Infrastructure company, today reported financial results for the first quarter
of fiscal year 2027, which ended on July 31, 2026. “NetApp delivered a record-
setting start to the year, exceeding guidance on every metric and achieving our
strongest first quarter ever,” said George Kurian, Chief Executive Officer. “Our
momentum reflects not only the trust of existing customers but also our success
in winning new ones, as organizations choose the NetApp Platform to power their
AI and hybrid multi-cloud initiatives. Through continued innovation and
strategic investments, we are enabling customers to address their most critical
needs and creating lasting value for all stakeholders.” First Quarter of Fiscal
Year 2027 Financial Results ($ in millions, except earnings per share)
GAAP Results Q1 FY27 Q1 FY26 % Change
──────────────────────────────────────────────────────────────────────────────
Net revenues $ 2,025 $ 1,559 30 %
Hybrid Cloud segment revenues $ 1,819 $ 1,398 30 %
Public Cloud segment revenues $ 206 $ 161 28 %
Gross profit $ 1,419 $ 1,098 29 %
Net income $ 375 $ 233 61 %
Earnings per share $ 1.88 $ 1.15 63 %
Net cash provided by operating $ 503 $ 673 (25 )%
activities
Non-GAAP Results Q1 FY27 Q1 FY26 % Change
──────────────────────────────────────────────────────────────────────────────
Billings $ 2,057 $ 1,511 36 %
Net revenues $ 2,025 $ 1,559 30 %
Hybrid Cloud segment revenues $ 1,819 $ 1,398 30 %
Public Cloud segment revenues $ 206 $ 161 28 %
Gross profit $ 1,429 $ 1,108 29 %
Net income $ 515 $ 314 64 %
Earnings per share $ 2.58 $ 1.55 66 %
Free cash flow $ 401 $ 620 (35 )%
Full reconciliations between
GAAP and
non-GAAP measures, and
explanations
related to the usage of
non-GAAP
measures, are provided below.
Second Quarter of Fiscal Year 2027 Financial Outlook
The Company provided the
following
financial guidance for the
second
quarter of fiscal year 2027:
Net revenues are expected to $2.025 billion - $2.175
be in the billion
range of:
GAAP Non-GAAP
Consolidated gross margins
are expected 66.0% - 67.0% 67.0% - 68.0%
to be in the range of:
Operating margins are
expected to be in 24.9% - 25.9% 30.9% - 31.9%
the range of:
Earnings per share is
expected to be in $1.97 - $2.07 $2.54 - $2.64
the range of:
Full Fiscal Year 2027 Financial Outlook
The Company provided the
following
financial guidance for the
full fiscal
year 2027:
Net revenues are expected to $7.975 billion - $8.225
be in the billion
range of:
GAAP Non-GAAP
Consolidated gross margins
are expected 67.1% - 68.1% 68.1% - 69.1%
to be in the range of:
Operating margins are
expected to be in 24.3% - 25.3% 30.3% - 31.3%
the range of:
Earnings per share is
expected to be in $7.35 - $7.65 $9.73 - $10.03
the range of:
Dividend The next cash dividend of $0.52 per share is to be paid on October 28,
2026, to stockholders of record as of the close of business on October 9, 2026.
First Quarter of Fiscal Year 2027 Business Highlights
Leading Product Innovation
NetApp announced the release of StorageGRID 12.1 , designed to help customers
scale AI and other modern workloads with a federated global namespace, improving
how data is accessed, processed, and managed across distributed environments to
support AI data pipelines.
NetApp announced new capabilities to NetApp Trident software 26.06 that helps
Kubernetes platform teams scale workloads, while adding smarter volume
placement, non-disruptive iSCSI volume rebalancing, expanded cloud support, and
deeper integration for OpenShift Virtualization migrations.
NetApp announced new data management capabilities optimized for Red Hat
OpenShift that enable advanced levels of resilience and scale for virtualized
environments, on-premises and in the cloud.
NetApp announced Instaclustr for Model Context Protocol (MCP) Gateway , a fully
managed gateway service that connects Instaclustr managed data infrastructure to
AI applications and agents.
NetApp announced the general availability of Azure NetApp Files support for
large files up to 64 TiB on regular volumes to help remove the friction from
large-scale migrations, de-risk VMware estate moves, and allow architects to
design cleaner, more cost-effective solutions.
NetApp announced the general availability of Azure NetApp Files Object REST API
to eliminate complex data pipelines and enable direct access to AI capabilities
through standardized interfaces.
NetApp introduced nconnect on Azure VMware Solution , increasing throughput and
lowering effective latency under load without adding datastores or hosts.
NetApp announced the general availability of Azure NetApp Files migration
assistant to accelerate and simplify migrations of business-critical
applications and data to Azure.
Customer and Partner Momentum
NetApp announced a collaboration with Cisco to offer new solutions for secure,
scalable, and simplified AI, expanding on the success of FlexPod to support AI
adoption across organizations.
NetApp announced an expanded collaboration with Cisco to strengthen defense-in-
depth strategies for customers with the new NetApp Splunk Security
Orchestration, Automation, and Response (SOAR) playbook.
NetApp announced a deepened global alliance with CGI where NetApp Keystone will
power CGI’s block storage solutions within its shared services platform.
NetApp and SK Telecom announced the completion of a joint proof of concept,
using NetApp AFX systems with SK Telecom’s Petasus AI Cloud, demonstrating a
solution that enables enterprises to scale AI infrastructure in virtualized
environments while maintaining high performance.
NetApp and Okestro signed a strategic partnership agreement to jointly develop
integrated enterprise AI and disaster recovery infrastructure.
NetApp announced a strategic partnership with Tata Consultancy Services to
better help organizations discover, classify, and govern data across locations,
reduce the impact of cyber-attacks, speed up recovery times, and provide
insights on sensitive data locations and permissions.
Corporate News and Events
NetApp announced its acquisition of DataPelago, Inc., to further enable
computing where data is created and stored, accelerating demanding workloads
while improving infrastructure efficiency at scale.
Personnel
NetApp appointed Alvaro Celis as Chief Partner and Ecosystem Officer to lead
partner ecosystems, modernize incentive programs, improve partner satisfaction,
and drive growth.
Awards and Recognition
NetApp CEO, George Kurian, was named to CRN ’s 25 Most Influential Executives of
2026 list , emphasizing his leadership in data storage amid the age of cloud and
AI.
NetApp’s AI Data Engine was named as a finalist in CRN ’s 2026 Tech Innovator
Awards , noting its ability to transform massive unstructured data estates into
always-fresh, AI-ready assets with enterprise-grade security, compliance, and
operational efficiency.
NetApp was named a Leader in the Forrester Wave TM : Object Storage Solutions,
Q2 2026 , showcasing our strong fit for large enterprises managing distributed,
regulated object estates that want to balance governance and hybrid consistency
against the need for AI-native storage services.
NetApp was recognized in The Wall Street Journal ’s 2026 Best Companies For The
Future list , ranking 60 out of 500 organizations.
NetApp was named as one of the Greatest Workplaces in America, California, and
Tech for 2026 by Newsweek , receiving a five-star rating based on a
comprehensive worker satisfaction study.
NetApp was named to Time Magazine ’s Best Companies of 2026 list, ranking 271
out of 1,000 organizations.
NetApp was named as one of the Best Companies to Work For by U.S. News ,
highlighting its top work environment.
Webcast and Conference Call Information
NetApp will host a conference call to discuss these results today at 2:30 p.m.
Pacific Time. To access the live webcast of this event, go to the NetApp
Investor Relations website atinvestors.netapp.com. In addition, this press
release and other information related to the call will be posted on the Investor
Relations website. An audio replay will be available on the website after 4:30
p.m. Pacific Time today. NetApp uses its website as a tool to disclose important
information about NetApp and comply with its disclosure obligations under
Regulation Fair Disclosure.
“Safe Harbor” Statement Under U.S. Private Securities Litigation Reform Act of
1995
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements include, but
are not limited to, all of the statements made in the Second Quarter of Fiscal
Year 2027 Financial Outlook section and the Full Fiscal Year 2027 Financial
Outlook section, and statements about our business, economic and market outlook,
financial guidance, our overall future prospects, expected benefits from our
acquisitions and partnerships, demand for our AI solutions and other offerings,
our ability to provide our customers secure, high-performance access to their
data, our ability to maintain our operating margins, our ability to sustain
growth, our platform and offerings, and our ability to capitalize on
opportunities and deliver increasing results and value for our stakeholders.
Actual results may differ materially from these statements for a variety of
reasons, including, without limitation, our ability to keep pace with the rapid
industry, technological and market trends and changes in the markets in which we
operate; our ability to execute our evolved cloud strategy and introduce and
gain market acceptance for our products and services; our ability to maintain
our customer, partner, supplier and contract manufacturer relationships on
favorable terms and conditions; global political, macroeconomic and market
conditions, including inflation, fluctuating interest rates, tariffs, changes in
trade policy, regulations, monetary policy shifts, recession risks, and foreign
exchange volatility and the resulting impact on demand for our products; the
impact of new or ongoing geopolitical conflicts and sanctions; adoption or
changes to laws, regulations, standards, or policies affecting our operations,
products, services, the storage industry, or AI usage; material cybersecurity
and other security breaches; the impact of supply chain disruptions on our
business operations, financial performance and results of operations; changes
and related uncertainty in U.S. government spending or policy, including due to
prolonged federal government shutdowns; changes in overall technology spending
by our customers; revenue seasonality; changes in laws or regulations, including
those relating to privacy, data protection and information security; the timing
of orders and their fulfillment; and our ability to manage our gross profit
margins, including managing component costs. These and other equally important
factors are described in reports and documents we file from time to time with
the Securities and Exchange Commission, including the factors described under
the sections titled “Risk Factors” in our most recently filed annual report on
Form 10-K and quarterly report on Form 10-Q. All statements made in this release
are made only as of the date set forth at the beginning of this release. We
disclaim any obligation to update information contained in this press release,
whether as a result of new information, future events, or otherwise.
NetApp Usage of Non-GAAP Financial Information
To supplement NetApp’s condensed consolidated financial statement information
presented in accordance with generally accepted accounting principles in the
United States (GAAP), NetApp provides investors with certain non-GAAP measures,
including, but not limited to, historical non-GAAP gross margins, non-GAAP gross
profit, non-GAAP operating income, non-GAAP operating margins, non-GAAP net
income, non-GAAP effective tax rate, free cash flow, billings, and historical
and projected non-GAAP earnings per share.
NetApp believes that the presentation of its non-GAAP measures, when shown in
conjunction with the corresponding GAAP measures, provides useful information to
investors and management regarding financial and business trends relating to its
financial condition and results of operations. Non-GAAP financial measures are
used to: (1) measure company performance against historical results, (2)
facilitate comparisons to our competitors’ operating results, and (3) allow
greater transparency with respect to information used by management in financial
and operational decision making.
NetApp believes that the presentation of non-GAAP gross margins, non-GAAP gross
profit, non-GAAP operating income, non-GAAP operating margins, non-GAAP
effective tax rate, non-GAAP net income, and non-GAAP earnings per share data
provides investors with supplemental metrics that assist in understanding
current results and future prospects, earnings and profitability that are
complementary to GAAP metrics. Each of these non-GAAP metrics is defined as the
applicable GAAP metric adjusted to exclude the items defined in A through I
below, as applicable, while our non-GAAP effective tax rate and non-GAAP net
income also reflect a non-GAAP tax provision, as described in item J below,
instead of our GAAP tax provision. GAAP earnings per share and non-GAAP earnings
per share are calculated using the net income divided by the diluted number of
shares for the applicable period.
NetApp believes that the presentation of free cash flow, which it defines as the
net cash provided by operating activities less cash used to acquire property and
equipment, to be a liquidity measure that provides useful information to
investors and management because it reflects cash that can be used to, among
other things, invest in its business, make strategic acquisitions, repurchase
common stock, and pay dividends on its common stock. As free cash flow is not a
measure of liquidity calculated in accordance with GAAP, free cash flow should
be considered in addition to, but not as a substitute for, the analysis provided
in the statement of cash flows.
NetApp approximates billings by adding net revenues as reported on our Condensed
Consolidated Statements of Operations for the period to the change in total
deferred revenue as reported on our Condensed Consolidated Statements of Cash
Flows for the same period. Billings is a performance measure that NetApp
believes provides useful information to investors and management because it
approximates the amounts under purchase orders received by us during a given
period that have been billed.
NetApp excludes the following items from its non-GAAP measures when applicable:
A. Amortization of intangible assets. NetApp records amortization of intangible
assets that were acquired in connection with its business combinations. The
amortization of intangible assets varies depending on the level of acquisition
activity. Management finds it useful to exclude these charges to assess the
appropriate level of various operating expenses to assist in budgeting, planning
and forecasting future periods and in measuring operational performance.
B. Stock-based compensation expenses. NetApp excludes stock-based compensation
expenses from its non-GAAP measures primarily because the amount can fluctuate
based on variables unrelated to the performance of the underlying business.
While management views stock-based compensation as a key element of our employee
retention and long-term incentives, we do not view it as an expense to be used
in evaluating operational performance in any given period.
C. Litigation settlements. NetApp may periodically incur charges or benefits
related to litigation settlements. NetApp excludes these charges and benefits,
when significant, because it does not believe they are reflective of ongoing
business and operating results.
D. Acquisition-related expenses. NetApp excludes acquisition-related expenses,
including (a) due diligence, legal and other one-time integration charges and
(b) write down of assets acquired that NetApp does not intend to use in its
ongoing business, from its non-GAAP measures, primarily because they are not
related to our ongoing business or cost base and, therefore, are less useful for
future planning and forecasting.
E. Restructuring charges. These charges consist of restructuring charges that
are incurred based on the particular facts and circumstances of restructuring
decisions, including employment and contractual settlement terms, and other
related charges, and can vary in size and frequency. We therefore exclude them
in our assessment of operational performance.
F. Asset impairments. These are non-cash charges to write down assets when there
is an indication that the asset has become impaired. Management finds it useful
to exclude these non-cash charges due to the unpredictability of these events in
its assessment of operational performance.
G. Gains/losses on the sale or derecognition of assets. These are gains/losses
from the sale of our properties and other transactions in which we transfer
and/or lose control of assets to a third party. This is inclusive of third-party
advisory, legal and other costs that result directly from and are essential to a
sale transaction and that would not have been incurred had the decision to sell
not been made. Management believes that these transactions do not reflect the
results of our underlying, ongoing business and, therefore, are less useful for
future planning and forecasting.
H. Gains/losses on the sale of investments in equity securities. These are
gains/losses from the sale of our investment in certain equity securities.
Typically, such investments are sold as a result of a change in control of the
underlying businesses. Management believes that these transactions do not
reflect the results of our underlying, ongoing business and, therefore, are less
useful for future planning and forecasting.
I. Debt extinguishment costs. NetApp excludes certain non-recurring expenses
incurred as a result of the early extinguishment of debt. Management believes
such non-recurring costs do not reflect the results of its underlying, ongoing
business and, therefore, are less useful for future planning and forecasting.
J. Income tax effects. NetApp’s non-GAAP tax provision is based upon a projected
annual non-GAAP effective tax rate for the first three quarters of the fiscal
year and an actual non-GAAP tax provision for the fourth quarter of the fiscal
year. The non-GAAP tax provision also excludes, when applicable, (a) tax charges
or benefits in the current period that relate to one or more prior fiscal
periods that are a result of events such as changes in tax legislation,
authoritative guidance, income tax audit settlements, statute lapses and/or
court decisions, (b) tax charges or benefits that are attributable to unusual or
non-recurring book and/or tax accounting method changes, (c) tax charges or
benefits that are a result of a non-routine foreign cash repatriation, (d) tax
charges or benefits that are a result of infrequent restructuring of the
Company’s tax structure, (e) tax charges or benefits that are a result of a
change in valuation allowance, and (f) tax charges or benefits resulting from
the integration of intellectual property from acquisitions. Management believes
that the use of non-GAAP tax provisions provides a more meaningful measure of
the Company’s operational performance.
Non-GAAP measures are not in accordance with, or an alternative for, measures
prepared in accordance with GAAP and may be different from non-GAAP measures
used by other companies. In addition, non-GAAP measures are not based on any
comprehensive set of accounting rules or principles. NetApp believes that non-
GAAP measures have limitations in that they do not reflect all of the amounts
associated with the Company’s results of operations as determined in accordance
with GAAP and that these measures should only be used to evaluate the Company’s
results of operations in conjunction with the corresponding GAAP measures.
NetApp management compensates for these limitations by analyzing current and
projected results on a GAAP basis as well as a non-GAAP basis. The presentation
of non-GAAP financial information is not meant to be considered in isolation or
as a substitute for the directly comparable financial measures prepared in
accordance with GAAP. A detailed reconciliation of our non-GAAP to GAAP results
can be found herein. In the press release and accompanying financial statements
and reconciliations, the terms "operating income" and "income from operations"
are used interchangeably. Similarly, "earnings per share" and "net income per
share" are also used interchangeably.
Constant Currency
In periods in which the impacts of foreign currency exchange rate changes are
significant, NetApp presents certain constant currency growth rates or
quantifies the impact of foreign currency exchange rate changes on year-over-
year fluctuations, including for net revenues, billings, and earnings. This
constant currency information assumes that the same foreign currency exchange
rates that were in effect for the comparable prior-year period were used in
translation of the current period results.
About NetApp
For more than three decades, NetApp has helped the world’s leading organizations
navigate change – from the rise of enterprise storage to the intelligent era
defined by data and AI. Today, NetApp is the Intelligent Data Infrastructure
company, helping customers turn data into a catalyst for innovation, resilience,
and growth.
At the heart of that infrastructure is the NetApp data platform – the unified,
enterprise-grade, intelligent foundation that connects, protects, and activates
data across every cloud, workload, and environment. Built on the proven power of
NetApp ONTAP, our leading data management software and OS, and enhanced by
automation through the AI Data Engine and AFX, it delivers observability,
resilience, and intelligence at scale.
Disaggregated by design, the NetApp data platform separates storage, services,
and control so enterprises can modernize faster, scale efficiently, and innovate
without lock-in. As the only enterprise storage platform natively embedded in
the world’s largest clouds, it gives organizations the freedom to run any
workload anywhere with consistent performance, governance, and protection.
With NetApp, data is always ready – ready to defend against threats, ready to
power AI, and ready to drive the next breakthrough. That’s why the world’s most
forward-thinking enterprises trust NetApp to turn intelligence into advantage.
Learn more atwww.netapp.comor follow us onX,LinkedIn,Facebook, andInstagram.
NetApp, the NetApp logo, and the marks listed at http://www.netapp.com/TM are
trademarks of NetApp, Inc. All other marks are the property of their respective
owners.
NETAPP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ($ in millions) (Unaudited)
July 31, 2026 April 24, 2026
──────────────────────────────────────────────────────────────────────────────
ASSETS
Current assets:
Cash, cash equivalents and $ 3,576 $ 3,584
investments
Accounts receivable 966 1,286
Inventories 375 198
Other current assets 755 708
Total current assets 5,672 5,776
Property and equipment, net 663 592
Goodwill and purchased intangible 2,954 2,794
assets, net
Other non-current assets 1,666 1,582
Total assets $ 10,955 $ 10,744
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 566 $ 550
Accrued expenses 1,200 1,151
Current portion of long-term debt 550 —
Short-term deferred revenue 2,252 2,320
Total current liabilities 4,568 4,021
Long-term debt 1,938 2,487
Other long-term liabilities 360 360
Long-term deferred revenue 2,594 2,525
Total liabilities 9,460 9,393
Stockholders' equity 1,495 1,351
Total liabilities and stockholders' $ 10,955 $ 10,744
equity
NETAPP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ($ in millions,
except net income per share amounts) (Unaudited)
Three Months
Ended July 31, 2026 July 25, 2025
──────────────────────────────────────────────────────────────────────────────
Revenues:
Product $ 987 $ 654
Services 1,038 905
Net revenues 2,025 1,559
Cost of revenues:
Cost of product 450 302
Cost of services 156 159
Total cost of 606 461
revenues
Gross profit 1,419 1,098
Operating
expenses:
Sales and 507 461
marketing
Research and 274 242
development
General and 98 84
administrative
Restructuring 56 2
charges
Total operating 935 789
expenses
Income from 484 309
operations
Other expense, — (5 )
net
Income before 484 304
income taxes
Provision for 109 71
income taxes
Net income $ 375 $ 233
Net income per
share:
Basic $ 1.91 $ 1.16
Diluted $ 1.88 $ 1.15
Shares used in
net income per
share
calculations:
Basic 196 201
Diluted 200 203
NETAPP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in millions)
(Unaudited)
Three Months
Ended July 31, 2026 July 25, 2025
──────────────────────────────────────────────────────────────────────────────
Cash flows from
operating
activities:
Net income $ 375 $ 233
Adjustments to
reconcile net
income to net
cash
provided by
operating
activities:
Depreciation
and 33 51
amortization
Non-cash
operating lease 11 11
cost
Stock-based 98 83
compensation
Deferred income (5 ) 9
taxes
Other items, (15 ) 46
net
Changes in
assets and
liabilities:
Accounts 317 466
receivable
Inventories (176 ) 54
Accounts 19 (107 )
payable
Accrued (75 ) (240 )
expenses
Deferred 32 (48 )
revenue
Changes in
other operating
assets and (111 ) 115
liabilities,
net
Net cash
provided by 503 673
operating
activities
Cash flows from
investing
activities:
Purchases of
investments, (494 ) (143 )
net
Purchases of
property and (102 ) (53 )
equipment
Acquisition of
business, net (78 ) —
of cash
acquired
Other investing — 15
activities, net
Net cash used
in investing (674 ) (181 )
activities
Cash flows from
financing
activities:
Proceeds from
issuance of
common stock 57 54
under employee
stock award
plans
Payments for
taxes related
to net share (74 ) (57 )
settlement of
stock awards
Repurchase of (200 ) (300 )
common stock
Repayments and
extinguishment — (750 )
of debt
Dividends paid (102 ) (104 )
Net cash used
in financing (319 ) (1,157 )
activities
Effect of
exchange rate
changes on
cash, (6 ) 7
cash
equivalents and
restricted cash
Net change in
cash, cash (496 ) (658 )
equivalents and
restricted cash
Cash, cash
equivalents and
restricted
cash:
Beginning of 2,075 2,749
period
End of period $ 1,579 $ 2,091
NETAPP, INC.
RECONCILIATION OF GAAP TO NON-GAAP
INCOME STATEMENT INFORMATION
($ in millions) Q1 FY27 Q1 FY26
──────────────────────────────────────────────────────────────────────
NET INCOME $ 375 $ 233
Adjustments:
Amortization of intangible assets 6 6
Stock-based compensation 98 83
Restructuring charges 56 2
Acquisition-related expense 1 —
Gains/losses on the sale or — 1
derecognition of assets
Income tax effects (21 ) (11 )
NON-GAAP NET INCOME $ 515 $ 314
COST OF REVENUES $ 606 $ 461
Adjustments:
Amortization of intangible assets (3 ) (3 )
Stock-based compensation (7 ) (7 )
NON-GAAP COST OF REVENUES $ 596 $ 451
COST OF PRODUCT REVENUES $ 450 $ 302
Adjustments:
Stock-based compensation (2 ) (1 )
NON-GAAP COST OF PRODUCT REVENUES $ 448 $ 301
COST OF SERVICES REVENUES $ 156 $ 159
Adjustments:
Amortization of intangible assets (3 ) (3 )
Stock-based compensation (5 ) (6 )
NON-GAAP COST OF SERVICES REVENUES $ 148 $ 150
GROSS PROFIT $ 1,419 $ 1,098
Adjustments:
Amortization of intangible assets 3 3
Stock-based compensation 7 7
NON-GAAP GROSS PROFIT $ 1,429 $ 1,108
NETAPP, INC.
RECONCILIATION OF GAAP TO NON-GAAP
INCOME STATEMENT INFORMATION
($ in millions) Q1 FY27 Q1 FY26
─────────────────────────────────────────────────────────────────────────
SALES AND MARKETING EXPENSES $ 507 $ 461
Adjustments:
Amortization of intangible assets (3 ) (3 )
Stock-based compensation (40 ) (34 )
NON-GAAP SALES AND MARKETING EXPENSES $ 464 $ 424
RESEARCH AND DEVELOPMENT EXPENSES $ 274 $ 242
Adjustments:
Stock-based compensation (35 ) (25 )
NON-GAAP RESEARCH AND DEVELOPMENT $ 239 $ 217
EXPENSES
GENERAL AND ADMINISTRATIVE EXPENSES $ 98 $ 84
Adjustments:
Stock-based compensation (16 ) (17 )
Acquisition-related expense (1 ) —
Gains/losses on the sale or — (1 )
derecognition of assets
NON-GAAP GENERAL AND ADMINISTRATIVE $ 81 $ 66
EXPENSES
RESTRUCTURING CHARGES $ 56 $ 2
Adjustments:
Restructuring charges (56 ) (2 )
NON-GAAP RESTRUCTURING CHARGES $ — $ —
OPERATING EXPENSES $ 935 $ 789
Adjustments:
Amortization of intangible assets (3 ) (3 )
Stock-based compensation (91 ) (76 )
Restructuring charges (56 ) (2 )
Acquisition-related expense (1 ) —
Gains/losses on the sale or — (1 )
derecognition of assets
NON-GAAP OPERATING EXPENSES $ 784 $ 707
NETAPP, INC.
RECONCILIATION OF GAAP TO NON-GAAP
INCOME STATEMENT INFORMATION
($ in millions, except net income per
share) Q1 FY27 Q1 FY26
──────────────────────────────────────────────────────────────────────────────
INCOME FROM OPERATIONS $ 484 $ 309
Adjustments:
Amortization of intangible assets 6 6
Stock-based compensation 98 83
Restructuring charges 56 2
Acquisition-related expense 1 —
Gains/losses on the sale or — 1
derecognition of assets
NON-GAAP INCOME FROM OPERATIONS $ 645 $ 401
INCOME BEFORE INCOME TAXES $ 484 $ 304
Adjustments:
Amortization of intangible assets 6 6
Stock-based compensation 98 83
Restructuring charges 56 2
Acquisition-related expense 1 —
Gains/losses on the sale or — 1
derecognition of assets
NON-GAAP INCOME BEFORE INCOME TAXES $ 645 $ 396
PROVISION FOR INCOME TAXES $ 109 $ 71
Adjustments:
Income tax effects 21 11
NON-GAAP PROVISION FOR INCOME TAXES $ 130 $ 82
NET INCOME PER SHARE $ 1.88 $ 1.15
Adjustments:
Amortization of intangible assets 0.03 0.03
Stock-based compensation 0.49 0.41
Restructuring charges 0.28 0.01
Acquisition-related expense 0.01 —
Income tax effects (0.11 ) (0.05 )
NON-GAAP NET INCOME PER SHARE $ 2.58 $ 1.55
RECONCILIATION OF GAAP TO NON-GAAP
GROSS MARGIN
($ in millions)
Gross margin
Cost of revenues adjustments 70.1 70.4
Non-GAAP Gross margin 0.5 % 0.7 %
Cost of revenues 70.6 % 71.1 %
Cost of revenues adjustments: 606 % 461 %
Amortization of intangible assets (3 ) (3 )
Stock-based compensation Q1 FY27 (7 ) Q1 FY26 (7 )
──────────────────────────────────────────────────────────────────────────────
Non-GAAP Cost of revenues $ 596 $ 451
Net revenues $ 2,025 $ 1,559
RECONCILIATION OF GAAP TO NON-GAAP
PRODUCT GROSS MARGIN
($ in millions)
Product gross margin
Cost of product revenues adjustments
Non-GAAP Product gross margin 54.4 53.8
Cost of product revenues 0.2 % 0.2 %
Cost of product revenues 54.6 % 54.0 %
adjustments: 450 % 302 %
Stock-based compensation Q1 FY27 (2 ) Q1 FY26 (1 )
──────────────────────────────────────────────────────────────────────────────
Non-GAAP Cost of product revenues $ 448 $ 301
Product revenues $ 987 $ 654
RECONCILIATION OF GAAP TO NON-GAAP
SERVICES GROSS MARGIN
($ in millions)
Services gross margin
Cost of services revenues
adjustments
Non-GAAP Services gross margin 85.0 82.4
Cost of services revenues 0.7 % 1.0 %
Cost of services revenues 85.7 % 83.4 %
adjustments: 156 % 159 %
Amortization of intangible assets (3 ) (3 )
Stock-based compensation Q1 FY27 (5 ) Q1 FY26 (6 )
──────────────────────────────────────────────────────────────────────────────
Non-GAAP Cost of services revenues $ 148 $ 150
Services revenues $ 1,038 $ 905
RECONCILIATION OF GAAP TO NON-GAAP
OPERATING MARGIN
($ in millions)
Q1 FY27 Q1 FY26
Operating margin 23.9 % 19.8 %
Adjustments 8.0 % 5.9 %
Non-GAAP Operating margin 31.9 % 25.7 %
Income from operations $ 484 $ 309
Income from operations
adjustments:
Amortization of intangible assets 6 6
Stock-based compensation 98 83
Restructuring charges 56 2
Acquisition-related expense 1 —
Gains/losses on the sale or — 1
derecognition of assets
Non-GAAP Income from operations $ 645 $ 401
Net revenues $ 2,025 $ 1,559
RECONCILIATION OF GAAP TO NON-GAAP
EFFECTIVE TAX RATE
Q1 FY27 Q1 FY26
Effective tax rate 22.5 % 23.4 %
Adjustments:
Income tax effects (2.3 )% (2.7 )%
Non-GAAP Effective tax rate 20.2 % 20.7 %
RECONCILIATION OF NET CASH PROVIDED BY
OPERATING ACTIVITIES
TO FREE CASH FLOW (NON-GAAP)
($ in millions) Q1 FY27 Q1 FY26
──────────────────────────────────────────────────────────────────────────────
Net cash provided by operating $ 503 $ 673
activities
Purchases of property and equipment (102 ) (53 )
Free cash flow $ 401 $ 620
RECONCILIATION OF NET REVENUES
TO BILLINGS (NON-GAAP)
($ in millions) Q1 FY27 Q1 FY26
──────────────────────────────────────────────────────────────────────
Net revenues $ 2,025 $ 1,559
Change in deferred revenue* 32 (48 )
Billings $ 2,057 $ 1,511
* As reported on our Condensed
Consolidated Statements of Cash Flows
NETAPP, INC.
SUPPLEMENTAL DATA
($ in millions, except net
income per share, DSO, DPO,
and Inventory Turns)
(Unaudited)
Revenues by Segment Q1 FY27 Q1 FY26
──────────────────────────────────────────────────────────────────────────────
Product $ 987 $ 654
Support 720 647
Professional and Other 112 97
Services
Hybrid Cloud Segment Net 1,819 1,398
Revenues
Public Cloud Segment Net 206 161
Revenues
Net Revenues $ 2,025 $ 1,559
Hybrid Cloud Segment Net
Revenues by
Storage Category
Q1 FY27 Q1 FY26
All-flash revenues $ 1,309 $ 893
Hybrid-flash and other 510 505
revenues
Hybrid Cloud Segment Net $ 1,819 $ 1,398
Revenues
Gross Profit by Segment
Q1 FY27 Q1 FY26
Product $ 539 $ 353
Support 671 597
Professional and Other 41 29
Services
Hybrid Cloud Segment Gross 1,251 979
Profit
Public Cloud Segment Gross 178 129
Profit
Total Segments Gross Profit 1,429 1,108
Amortization of Intangible (3 ) (3 )
Assets
Stock-based Compensation (7 ) (7 )
Unallocated Cost of Revenues (10 ) (10 )
Gross Profit $ 1,419 $ 1,098
Gross Margin by Segment
Q1 FY27 Q1 FY26
Product 54.6 % 54.0 %
Support 93.2 % 92.3 %
Professional and Other 36.6 % 29.9 %
Services
Hybrid Cloud Segment Gross 68.8 % 70.0 %
Margin
Public Cloud Segment Gross 86.4 % 80.1 %
Margin
NETAPP, INC.
SUPPLEMENTAL DATA
($ in millions, except net income per
share, DSO, DPO, and Inventory Turns)
(Unaudited)
Net Revenues by Geographic Area
Q1 FY27 Q1 FY26
Americas 48 % 51 %
Americas Commercial 37 % 40 %
U.S. Public Sector* 11 % 11 %
EMEA 33 % 32 %
Asia Pacific 19 % 17 %
* U.S. Public Sector includes revenue
from both the U.S. federal government
and U.S. state governments, local
municipalities and education
institutions.
Non-GAAP Income from
Operations, Income
before Income Taxes &
Effective Tax Rate Q1 FY27 Q1 FY26
──────────────────────────────────────────────────────────────────────────────
Non-GAAP Income from $ 645 $ 401
Operations
Operating Margin 31.9 % 25.7 %
Non-GAAP Income before Income $ 645 $ 396
Taxes
Non-GAAP Effective Tax Rate 20.2 % 20.7 %
Non-GAAP Net Income
Q1 FY27 Q1 FY26
Non-GAAP Net Income $ 515 $ 314
Non-GAAP Weighted Average
Common Shares 200 203
Outstanding, Diluted
Non-GAAP Net Income per Share, $ 2.58 $ 1.55
Diluted
Select Balance Sheet Items Q1 FY27 Q1 FY26
──────────────────────────────────────────────────────────────────────
Deferred Revenue $ 4,846 $ 4,526
DSO (days) 47 46
DPO (days) 92 80
Inventory Turns 6 14
Days sales outstanding (DSO) is defined
as accounts receivable divided by net
revenues, multiplied by the number of
days in the quarter.
Days payables outstanding (DPO) is
defined as accounts payable divided by
cost of revenues, multiplied by the
number of days in the quarter.
Inventory turns is defined as annualized
cost of revenues divided by net
inventories.
Select Cash Flow Statement Items Q1 FY27 Q1 FY26
────────────────────────────────────────────────────────────────────────────
Net Cash Provided by Operating $ 503 $ 673
Activities
Purchases of Property and Equipment $ 102 $ 53
Free Cash Flow $ 401 $ 620
Free Cash Flow Margin 19.8 % 39.8 %
Free cash flow is a non-GAAP measure and
is defined as net cash provided by
operating activities less purchases of
property and equipment.
Free cash flow margin is defined as free
cash flow as a percentage of net
revenues.
Some items may not add or recalculate
due to rounding.
NETAPP, INC.
RECONCILIATION OF GAAP GUIDANCE TO NON-GAAP
SECOND QUARTER FISCAL 2027
Second Quarter
Fiscal 2027
GAAP Guidance - Gross Margin 66.0% - 67.0%
Adjustments:
Cost of revenues adjustments 1%
Non-GAAP Guidance - Gross Margin 67.0% - 68.0%
Second Quarter
Fiscal 2027
GAAP Guidance - Operating Margin 24.9% - 25.9%
Adjustments:
Stock-based compensation expense 6%
Non-GAAP Guidance - Operating Margin 30.9% - 31.9%
Some items may not add or recalculate due to
rounding.
Second Quarter
Fiscal 2027
GAAP Guidance - Net Income Per Share $1.97 - $2.07
Adjustments of Specific Items to Net Income
Per Share:
Amortization of intangible assets $0.03
Stock-based compensation expense $0.58
Income tax effects -$0.04
Total Adjustments $0.57
Non-GAAP Guidance - Net Income Per Share $2.54 - $2.64
Some items may not add or recalculate due to
rounding.
NETAPP, INC.
RECONCILIATION OF GAAP GUIDANCE TO NON-GAAP
FISCAL 2027
Fiscal 2027
GAAP Guidance - Gross Margin 67.1% - 68.1%
Adjustments:
Cost of revenues adjustments 1%
Non-GAAP Guidance - Gross Margin 68.1% - 69.1%
Fiscal 2027
GAAP Guidance - Operating Margin 24.3% - 25.3%
Adjustments:
Stock-based compensation expense 5%
Restructuring charges 1%
Non-GAAP Guidance - Operating Margin 30.3% - 31.3%
Some items may not add or recalculate due to
rounding.
Fiscal 2027
GAAP Guidance - Net Income Per Share $7.35 - $7.65
Adjustments of Specific Items to Net Income
Per Share:
Amortization of intangible assets $0.12
Stock-based compensation expense $2.19
Restructuring charges $0.28
Acquisition-related expenses $0.01
Income tax effects -$0.22
Total Adjustments $2.38
Non-GAAP Guidance - Net Income Per Share $9.73 - $10.03
Some items may not add or recalculate due to
rounding.
Contacts: (Press) Kenya Hayes 1 703 589 7595 kenya.hayes@netapp.com (Investors)
Kris Newton 1 408 822 3312 kris.newton@netapp.com