NetApp, Inc.

Record Q1 performance + strong margin/EPS leverage - Revenue $2.03B, +30% YoY (and +4% sequentially); ex–extra week revenue growth was +26% YoY (extra week contributed ~$65M, mostly support + public cloud). - Non-GAAP EPS $2.58, +66% YoY (outperformed guidance). - Gross profit $1.43B, +29% YoY; gross margin 70.6% (beat high end of guidance but down 50 bps YoY due to product mix shifting toward more product revenue). - Operating margin 31.9% (up 6.1 pts YoY); cash generation strong: FCF $401M. - Shareholder returns: $302M returned ($200M buybacks + $102M dividends of $0.52/share).

Guidance raised materially for both Q2 and full-year FY27 - Q2 outlook: revenue $2.10B ± $75M (midpoint +23% YoY), gross margin 67–68% (down sequentially—mix shift to higher product share), operating margin 30.9–31.9%, EPS $2.54–$2.64 (midpoint $2.59). - FY27 outlook raised: revenue $7.975B–$8.225B (midpoint $8.1B, +17% YoY, +$650M vs prior guidance). - FY27 profitability raised: gross margin 68.1–69.1%; operating margin 30.3–31.3%; EPS $9.73–$10.03 (midpoint $9.88, +22% YoY).

Demand signals: “structural improvement,” with some pockets of accelerated buying - Management attributes outperformance to broad-based strength across customer segments, industries, geographies, and workload types (on-prem, Keystone, cloud). - They distinguish drivers as: - Structural demand improvement (AI + modernization, strong multiyear agreement pipeline, broad portfolio strength). - Some accelerated purchases at large customers for less-priority workloads. - Pricing benefits from more agile pricing actions as component/commodity costs rise. - Key “durability” claim: customers are spending in dollars on data infrastructure; AI workloads are driving a higher budget priority—within accounts, lower-priority work may be deferred rather than eliminated.