Q3 2026 NetApp Inc Earnings Call Transcript
Key Points
- NetApp Inc (NTAP) reported a strong Q3 with revenue of $1.71 billion, marking a 4% year-over-year increase, and excluding the divested Spot business, revenue was up 6%.
- The company achieved record-high operating income and EPS, demonstrating strong profitability metrics.
- NetApp's all-flash array revenue reached a record, growing 11% year over year to $1 billion in Q3, with an annualized run rate of $4.2 billion.
- The company's AI-focused solutions, AFX and AI Data Engine, are gaining significant traction, with approximately 300 customers selecting NetApp for AI data preparation and storage.
- NetApp's Keystone Storage-as-a-Service offering saw a 65% revenue growth year over year, highlighting strong demand for flexible storage solutions.
- The company is facing challenges with rising memory prices, which have necessitated price increases and could impact customer budgets.
- Hybrid Cloud gross margin declined by 1.8 percentage points sequentially, primarily due to an unfavorable revenue mix and higher demand for certain products.
- Public Cloud revenue was flat compared to the previous year, although it grew 17% year over year when excluding the Spot business.
- The company is navigating a dynamic supply chain environment, with potential challenges in securing components like DRAM and NAND.
- There is uncertainty regarding the impact of future memory price hikes on product gross margins and customer demand.
Good day. Welcome to the NetApp third-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, ma'am.
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 fourth-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
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