Netapp Inc

FY26 performance: record profitability + cash + strong demand behind AI/cloud - FY2026 revenue $6.93B (+5% YoY), exceeding guidance; gross margin 71.3%, operating margin 30.2% (+190 bps YoY). - FY EPS $8.13 (+12% YoY) (more than double revenue growth), driven by operating leverage. - Cash: operating cash flow $2.07B and free cash flow $1.87B (~+40% YoY)—a major positive. - Q4 was also strong: revenue $1.95B (+12% YoY, +14% QoQ) and non-GAAP EPS $2.43 (+26% YoY) at/above the top end of guidance. - Strategic thesis reiterated: enterprise AI adoption is the tailwind; the problem is activating unstructured data, where NetApp positions its hybrid intelligent data infrastructure as a differentiator.

Where growth came from (good surprises: magnitude of AI wins, Keystone momentum, public cloud strength) - Public cloud revenue $688M in FY26 (+18% YoY) (normalized for divested Spot); cloud services grew 30% (first-party + marketplace). - All-flash revenue $4.2B (+11% YoY) with Q4 $1.2B (+18% YoY)—notable acceleration/strength. - Keystone (storage-as-a-service) grew ~+65% in FY26 (vs FY25); Q4 professional services also benefitted from Keystone growth. - AI traction was a standout “surprising” detail: ~500 AI/data-prep wins in Q4 bringing FY26 total to 1.1K+, with momentum described as broad-based across segments/geographies and use cases.

Guidance / forecasts: FY27 acceleration but with component-cost realism - FY27 revenue outlook: $7.325B–$7.575B (midpoint $7.45B = ~+8% YoY vs FY26’s ~+5%). - FY27 gross margin: 68.5%–69.5%; operating margin: 29.1%–30.1%. - FY27 EPS: $8.70–$9.00 (midpoint $8.85 = +9% YoY). - Assumptions/challenges embedded: possible pockets of accelerated purchasing and NetApp’s ongoing need to adjust pricing to track memory/component cost movements.