NetApp Revenue Jumps 30% to $2.025 Billion in First Quarter
Key Facts
NetApp reported revenue of $2.025 billion in the first quarter of its fiscal 2027, up 30% year over year, according to the company’s results. The figure exceeded the company’s range for the quarter of $1.750 billion to $1.900 billion. Billings, an indicator of sales for which the company issued invoices, rose to $2.057 billion, up 36% from the year-earlier period. Chief Executive George Kurian said the momentum reflected confidence among existing customers and the company’s success in attracting new ones. He added that those customers were running initiatives in artificial intelligence and multicloud hybrid cloud. The company said the quarter included an extra week, which should be taken into account when comparing revenue growth year over year.
Revenue growth was reflected in net income and earnings per share. Net income under generally accepted accounting principles was $375 million, compared with $233 million in the first quarter of fiscal 2026, an increase of 61%. Diluted earnings per share were $1.88, compared with $1.15 a year earlier, up 63%. The comparison shows an improvement in reported earnings alongside revenue growth, although it does not isolate the effect of each business or operating factor on the result. By revenue segment, hybrid cloud generated $1.819 billion, up 30% year over year. Public cloud recorded $206 million, up 28% from the year-earlier period.
The company links its commercial momentum to artificial intelligence and hybrid cloud initiatives, without attributing all revenue growth to AI or price increases. Kurian said the company had not only maintained the confidence of its existing customers but had also succeeded in winning new ones. The statement places customer-base expansion alongside demand tied to technology initiatives as part of the performance context. NetApp also announced its acquisition of DataPelago, a company specializing in AI-focused data infrastructure. It said the deal aims to simplify and accelerate the deployment of AI applications. The move is part of the company’s efforts to support this type of workload, alongside revenue growth in its hybrid and public cloud segments.
In contrast, NetApp said in its quarterly filing with the U.S. Securities and Exchange Commission that higher memory and other component costs affected gross profit margins. The company said, "We have experienced increased costs for memory and other components, which have impacted our gross profit margins." It added that it expects costs to remain high or continue rising in the near term. In response to cost pressures, the company raised prices in the fourth quarter of fiscal 2026, then implemented another increase at the start of the second quarter of fiscal 2027. It said it would continue to adjust prices as necessary to keep pace with costs. These disclosures do not specify how much of the cost increases the price hikes offset, or whether they offset them fully.
The company announced on September 2 that it had raised its fiscal 2027 outlook. Its current projections include revenue of $7.975 billion to $8.225 billion and non-GAAP earnings per share of $9.73 to $10.03. These ranges provide a framework for comparing expected full-year performance with first-quarter results, but they do not represent a new update issued with the results announcement. The next target date on the company’s calendar is December 1, 2026, when it is scheduled to report second-quarter fiscal 2027 results. Those results will provide a subsequent reading on revenue and earnings amid continued component costs and the price adjustments the company said it would make as needed. They will also show the next quarter’s performance following the company’s existing fiscal-year outlook.