NetApp, Inc.

Q1 FY27 revenue was $2.03 billion, up 30% year over year; excluding the extra week, revenue was up 26% year over year and the extra week contributed about $65 million. Non-GAAP EPS was $2.58, up 66% year over year. Gross profit was a record $1.43 billion, up 29% year over year, and gross margin was 70.6%, down 50 basis points year over year. Operating margin was 31.9%, up 6.1 percentage points year over year. By segment, Hybrid Cloud revenue was $1.82 billion, up 30%; Product revenue was $987 million, up 51%; Support revenue was $720 million, up 11%; Professional Services revenue was $112 million, up 15%; and Public Cloud revenue was $206 million, up 28%. Q1 cash flow from operations was $503 million and free cash flow was $401 million. NetApp raised FY27 guidance to revenue of $7.975 billion to $8.225 billion, EPS of $9.73 to $10.03, gross margin of 68.1% to 69.1%, and operating margin of 30.3% to 31.3%. For Q2, it guided to revenue of $2.1 billion plus or minus $75 million, gross margin of 67% to 68%, operating margin of 30.9% to 31.9%, and EPS of $2.54 to $2.64.

George Kurian framed the quarter as a record start to the year and said the business is seeing broad-based strength across customer types, geographies, and workloads. He emphasized that AI is becoming a business imperative and argued NetApp’s value comes from making data AI-ready in place, without forcing data movement, while also supporting cloud modernization and hybrid environments. His tone was confident and upbeat, with repeated references to durable demand, expanding opportunities, and the company’s leadership position.

Wissam Jabre highlighted that Q1 exceeded the high end of all guidance ranges, with revenue of $2.03 billion, EPS of $2.58, gross margin of 70.6%, and operating margin of 31.9%. He said the extra week added about $65 million to revenue, mainly in support and public cloud, and that the quarter benefited from healthier demand, some accelerated purchases, and pricing actions. On capital allocation, he noted $503 million of operating cash flow, $401 million of free cash flow, and $302 million returned to shareholders through $200 million of buybacks and $102 million in dividends; the balance sheet ended with $3.6 billion in cash and short-term investments, $2.5 billion in gross debt, and a $1.1 billion net cash position.

Analysts pressed management on how much of Q1 strength came from accelerated purchases and pricing versus a more durable demand improvement, and whether the Q2-to-H2 guide implied a slowdown. George Kurian said accelerated buying was limited to a small portion of customers, while the broader business showed strength across product lines, customer segments, and regions; Wissam Jabre said pricing actions are flowing through faster than in the past and product gross margin outlook for the rest of the year is slightly better than prior guidance. Questions also focused on AI-driven demand, hybrid flash versus all-flash, inventory, Keystone, and public cloud; management said AI is driving both direct AI deals and broader infrastructure modernization, all-flash remains the main growth driver, hybrid flash is resurging for lower-priority workloads, and inventory is being built to secure supply for growing demand.