Q2 2026 NetApp Inc Earnings Call Transcript
Key Points
- NetApp Inc (NTAP) delivered a strong Q2 with revenue of $1.71 billion, up 3% year over year, and excluding the divested spot business, total revenue was up 4%.
- All Flash and Public Cloud, which address growth markets and carry higher gross margins, made up 70% of Q2 revenue, contributing to record gross margins.
- The company saw strong demand for AI solutions, first-party, and marketplace cloud storage services, and all-flash offerings.
- NetApp Inc (NTAP) introduced significant innovations such as AFX and AIDE, enhancing AI workload capabilities and cyber resilience.
- Public Cloud revenue, excluding Spot, was up 18% year over year, driven by strong demand in first-party and marketplace storage services.
- Expected softness in USPS revenue was noted, which could impact future performance.
- The macroeconomic environment remains uncertain, posing potential risks to future growth.
- Despite strong performance, the company remains cautious about the US public sector business due to recent government shutdowns.
- Cash flow from operations was $127 million, and free cash flow was $78 million, which may be considered low relative to expectations.
- The company faces potential headwinds from component pricing, particularly in NAND, which could impact product gross margins in fiscal '27.
Good day, and welcome to the NetApp second-quarter of fiscal year 2026 earnings call. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Kris Newton, Vice President, Investor Relations. Please go ahead.
Hi, everyone. Thanks for joining us. With me today are our CEO, George Kurian; and CFO, Wissam Jabre. This call is being webcast live and will be available for replay on our website at netapp.com. During today's call, we will make forward-looking statements and projections with respect to our financial outlook and future prospects, including, without limitation, our guidance for the third quarter and fiscal year 2026, our expectations regarding future revenue, profitability and shareholder returns, and other growth initiatives and strategies.
These statements are subject to various risks and uncertainties, which may cause our actual results to differ materially. For more information, please refer to the documents we file
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