TLDR
- NetApp reported Q1 fiscal 2027 revenue of $2.03 billion, up 30% year over year, beating estimates of $1.84 billion
- Adjusted EPS came in at $2.58, well above the $2.11 analyst forecast
- Despite the beat, NTAP stock fell 8.92% in after-hours trading to $164.64
- Cash from operations dropped 25% year over year and free cash flow fell 35%
- NetApp raised full-year fiscal 2027 guidance, now expecting revenue of $7.98 billion to $8.23 billion
NetApp (NTAP) reported its best-ever start to a fiscal year on Wednesday, posting first-quarter revenue of $2.03 billion and adjusted EPS of $2.58. Both numbers topped Wall Street expectations by a wide margin. But the stock fell sharply anyway.
NTAP dropped 8.92% in after-hours trading to $164.64, after closing the regular session down 1.35% at $180.68. That put the stock roughly 10% below its pre-earnings close.
Revenue grew 30% from a year earlier, or 26% excluding an extra week in the quarter. Adjusted EPS climbed 66% year over year, showing strong operating leverage. The EPS beat of $0.47 was a 22% surprise above the consensus estimate.
NETAPP $NTAP Q1’27 EARNINGS HIGHLIGHTS
🔹 Revenue: $2.03B (Est. $1.84B) 🟢; +30% YoY
🔹 Adj. EPS: $2.58 (Est. $2.12) 🟢; +66% YoY
🔹 All-Flash Revenue: $1.3B
🔹 Public Cloud Revenue: $206M; +28% YoYRaises FY27 Guide:
🔹 Revenue: $7.98B-$8.23B (Est. $7.53B) 🟢
🔹 Adj. EPS:… pic.twitter.com/bUQrJp7CJz— Wall St Engine (@wallstengine) September 2, 2026
All-flash array revenue rose 47% year over year to $1.31 billion. Hybrid cloud revenue reached $1.82 billion, up 30%, and public cloud revenue rose 28% to $206 million. NetApp said it closed about 350 AI and data lake modernization deals during the quarter.
Operating income rose 61% to $645 million. Operating margin came in at 31.9%, up 6.1 percentage points from a year earlier.
What Pressured the Stock
Despite the headline beat, some numbers in the report gave investors pause. Cash from operations dropped 25% year over year to $503 million, and free cash flow fell 35% to $401 million.
Inventory climbed from $198 million to $375 million, with turnover running at less than half the rate from a year earlier. Restructuring costs surged to $56 million from just $2 million in the prior year period.
Management noted that some of the quarter’s strength came from an extra week and from accelerated purchases by a small number of large customers. That may have raised questions about whether the pace of growth is sustainable.
What Guidance Says
NetApp raised its full-year fiscal 2027 revenue outlook to a range of $7.975 billion to $8.225 billion. The midpoint of $8.1 billion implies about 17% year-over-year growth and represents a $650 million increase from prior guidance.
For Q2, the company guided for revenue of $2.1 billion plus or minus $75 million, and adjusted EPS of $2.54 to $2.64. Gross margin is expected to come in between 67% and 68%.
Adjusted EPS guidance for the full year moved up to a range of $9.73 to $10.03, compared with the prior forecast of $8.70 to $9.00.
CEO George Kurian called it “a stellar start to the year” and said the company exceeded its own Q1 guidance on every metric. CFO Wissam Jabre noted that EPS grew at more than double the rate of revenue, pointing to operational efficiency.
The 52-week range for NTAP runs from $93.69 to $209.06. Even after the after-hours drop, the stock remains well above its yearly low.
NetApp is currently integrating two recent acquisitions, DataPelago and JetStream. Management said it returned $302 million to stockholders in the quarter, including $200 million in buybacks and $102 million in dividends.
Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions — all in one powerful platform.
Sign up today and get 50% OFF full access to our premium stock picks.
Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
