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1. Company Snapshot

1.a. Company Description

NetApp, Inc.provides cloud-led and data-centric services to manage and share data on-premises, and private and public clouds worldwide.It operates in two segments, Hybrid Cloud and Public Could.


The company offers intelligent data management software, such as NetApp ONTAP, NetApp Snapshot, NetApp SnapCenter Backup Management, NetApp SnapMirror Data Replication, NetApp SnapLock Data Compliance, NetApp ElementOS software, and NetApp SANtricity software; and storage infrastructure solutions, including NetApp All-Flash FAS series, NetApp Fabric Attached Storage, NetApp FlexPod, NetApp E/EF series, NetApp StorageGRID, and NetApp SolidFire.It also provides cloud storage and data services comprising NetApp Cloud Volumes ONTAP, Azure NetApp Files, Amazon FSx for NetApp ONTAP, NetApp Cloud Volumes Service for Google Cloud, NetApp Cloud Sync, NetApp Cloud Tiering, NetApp Cloud Backup, NetApp Cloud Data Sense, and NetApp Cloud Volumes Edge Cache; and cloud operations services, such as NetApp Cloud Insights, Spot Ocean Kubernetes Suite, Spot Security, Spot Eco, and Spot CloudCheckr.In addition, the company offers application-aware data management service under the NetApp Astra name; and professional and support services, such as strategic consulting, professional, managed, and support services.


Further, it provides assessment, design, implementation, and migration services.The company serves the energy, financial service, government, technology, internet, life science, healthcare service, manufacturing, media, entertainment, animation, video postproduction, and telecommunication markets through a direct sales force and an ecosystem of partners.NetApp, Inc.


was incorporated in 1992 and is headquartered in San Jose, California.

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1.b. Last Insights on NTAP

NetApp's recent performance has been negatively impacted by several factors. The company's stock holdings have decreased, with World Investment Advisors cutting its stake by 83.1% and Spire Wealth Management lessening its holdings by 76.7%. Additionally, the company faces competition from Western Digital (WDC), which has a sharper focus post-SanDisk spinoff and AI-driven HDD demand. Furthermore, NetApp's upcoming Q2 fiscal year 2026 earnings release on November 25, 2025, may also be a concern for investors. Institutional investors' reduced holdings and increased competition are key concerns.

1.c. Company Highlights

2. NetApp's Q2 Results: Strong Performance Driven by All-Flash and Cloud Growth

NetApp delivered a strong Q2 with revenue of $1.71 billion, up 3% year over year, and non-GAAP earnings per share of $2.05. The company's gross margin set a Q2 record and exceeded guidance, driven by operational discipline and a shift to higher-margin products. The all-flash and public cloud revenue made up 70% of Q2 revenue, with all-flash array revenue growing 9% year-over-year to $1 billion. The actual EPS came out at $2.05, which is higher than the previous quarter's EPS.

Publication Date: Nov -26

📋 Highlights
  • Revenue & EPS Growth:: Q2 revenue reached $1.71B (+3% YoY), with non-GAAP EPS at $2.05, reflecting strong performance.
  • All-Flash & Cloud Revenue:: 70% of Q2 revenue from all-flash and public cloud, with all-flash revenue climbing 9% YoY to $1B.
  • Gross Margin Expansion:: Record Q2 gross margin of 59% driven by operational discipline and higher-margin product mix, exceeding guidance.
  • Capital Return:: $353M returned to shareholders via $250M share repurchases and $103M dividends in Q2.
  • Hyperscale Growth:: First-party hyperscale services revenue surged 32% YoY, highlighting cloud infrastructure strength.

Segment Performance

The company's first-party hyperscale services business grew 32% year-over-year, and cloud revenue growth rate has been consistent in the high teens. NetApp is positive about the growth of its first-party and marketplace cloud services business, introducing innovations to capture AI and data-intensive workloads on the cloud. The storage-as-a-service model is growing, driven by customers' maturity in using cloud-based business models.

Guidance and Outlook

NetApp expects Q3 revenue of $1.69 billion, plus or minus $75 million, and EPS of $2.01 to $2.11. For the full year, the company expects revenue of $6.625 billion to $6.875 billion and EPS of $7.75 to $8.05. The guidance suggests acceleration in the second half of the year, driven by growth in non-U.S. public segments. Wissam Jabre mentioned that product gross margins are expected to remain relatively unchanged through the rest of the year, around 59%.

Valuation

With a P/E Ratio of 19.14 and EV/EBITDA of 13.51, NetApp's valuation appears reasonable considering its strong performance and growth prospects. The company's ROE of 120.04% and ROIC of 18.71% indicate efficient capital allocation. Analysts estimate next year's revenue growth at 2.9%, which is relatively modest. The Dividend Yield is 1.87%, providing a relatively stable return for shareholders.

AI and Cloud Opportunities

The company closed 200 AI-related deals in the quarter, with a stable mix of transactions, and growth in the number of wins. NetApp is well-positioned to capture the growing demand for AI and cloud services, with its unified data management, hybrid cloud deployment options, and built-in cyber resilience solutions.

Operational Highlights

The company has secured supply commitments and pricing through the end of the fiscal year and will take actions to guarantee supply for the next fiscal year. Operating expenses are expected to be slightly higher in the second half as the company continues to invest in growth. All Flash growth accelerated well in the quarter, driven by AI, portfolio refresh, and strong results in the high-performance flash area.

3. NewsRoom

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Edgestream Partners L.P. Purchases Shares of 54,039 NetApp, Inc. $NTAP

Dec -03

Source: defenseworld.net

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NetApp, Inc. (NTAP) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

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NetApp Collaborates with AWS to bring Enterprise Data to AWS AI Services

Dec -02

Source: businesswire.com

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Unlocking NetApp (NTAP) International Revenues: Trends, Surprises, and Prospects

Dec -01

Source: zacks.com

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NetApp, Inc. $NTAP Shares Purchased by Coldstream Capital Management Inc.

Nov -28

Source: defenseworld.net

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NetApp's $530M AI Windfall: The Quarter Wall Street Didn't See Coming

Nov -27

Source: gurufocus.com

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NetApp (NASDAQ:NTAP) Shares Gap Up After Earnings Beat

Nov -27

Source: defenseworld.net

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NetApp's Q2 Earnings & Revenues Surpass Estimates, Stock Up

Nov -26

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.10%)

6. Segments

Hybrid Cloud

Expected Growth: 6.0%

NetApp's hybrid cloud growth of 6.0% is driven by increasing demand for flexible and scalable data management solutions. Key drivers include the adoption of cloud-based services, growing need for data portability, and rising investments in digital transformation initiatives. NetApp's strategic acquisitions and partnerships have also enhanced its hybrid cloud offerings, contributing to the segment's growth.

Public Cloud

Expected Growth: 7.0%

Public Cloud growth at NetApp is driven by increasing demand for cloud storage, scalability, and flexibility. Key drivers include rising adoption of cloud-first strategies, expanding data sets, and NetApp's strategic partnerships with major cloud providers, enabling seamless integration and management of data across environments, fueling 7.0% growth.

7. Detailed Products

NetApp Storage Systems

NetApp storage systems provide a range of storage solutions, including FAS (Fabric-Attached Storage), AFF (All-Flash FAS), and ONTAP Select. These systems offer high-performance, scalable, and reliable storage for various workloads, including file and block storage, databases, and virtualized environments.

ONTAP Operating System

ONTAP is NetApp's operating system for their storage systems, providing a robust and feature-rich platform for data management. ONTAP offers advanced data management capabilities, including data deduplication, compression, and encryption.

NetApp Cloud Services

NetApp Cloud Services provide a range of cloud-based data management solutions, including NetApp Cloud Volumes, Cloud Volumes ONTAP, and Cloud Backup. These services enable organizations to manage their data in the cloud, with features such as data replication, backup, and archiving.

NetApp Data Management Software

NetApp data management software provides a range of tools for managing and protecting data, including NetApp Snapshots, SnapRestore, and SnapVault. These tools enable organizations to manage their data, including backup, restore, and disaster recovery.

NetApp InsightIQ

NetApp InsightIQ provides real-time monitoring and analytics for NetApp storage systems, enabling organizations to optimize their storage infrastructure and improve performance.

8. NetApp, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

NetApp, Inc. operates in the data storage and management industry, where substitutes such as cloud storage, object storage, and other data management solutions exist. However, the company's strong brand recognition, product offerings, and customer relationships mitigate the threat of substitutes.

Bargaining Power Of Customers

NetApp's customers are large enterprises, cloud service providers, and governments, which have significant negotiating power due to their substantial storage needs and purchasing volumes. These customers can demand lower prices, customized solutions, and high service levels.

Bargaining Power Of Suppliers

NetApp has a diverse supplier base and uses commodity components, which reduces its dependence on individual suppliers. The company also has a strong supply chain management system, which enables it to negotiate favorable terms with suppliers.

Threat Of New Entrants

The data storage and management industry has high barriers to entry, including significant R&D investments, complex product development, and established relationships with customers and partners. New entrants face challenges in competing with NetApp's brand recognition, product portfolio, and market presence.

Intensity Of Rivalry

The data storage and management industry is highly competitive, with established players like EMC, IBM, HP, and Dell, as well as newer entrants like Pure Storage and Nutanix. The competition is intense, with companies competing on price, product features, and service levels, which can impact NetApp's market share and profitability.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 69.83%
Debt Cost 4.33%
Equity Weight 30.17%
Equity Cost 10.97%
WACC 6.33%
Leverage 231.41%

11. Quality Control: NetApp, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
HP

A-Score: 5.2/10

Value: 8.2

Growth: 3.7

Quality: 4.8

Yield: 7.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
NetApp

A-Score: 5.2/10

Value: 3.4

Growth: 5.8

Quality: 7.2

Yield: 4.0

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

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Arista Networks

A-Score: 5.0/10

Value: 0.0

Growth: 9.4

Quality: 8.5

Yield: 0.0

Momentum: 8.5

Volatility: 3.7

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Dell Technologies

A-Score: 4.7/10

Value: 5.3

Growth: 4.0

Quality: 4.6

Yield: 3.0

Momentum: 7.0

Volatility: 4.0

1-Year Total Return ->

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Western Digital

A-Score: 4.5/10

Value: 2.3

Growth: 3.4

Quality: 7.1

Yield: 0.0

Momentum: 10.0

Volatility: 4.0

1-Year Total Return ->

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Super Micro Computer

A-Score: 4.4/10

Value: 3.3

Growth: 9.9

Quality: 5.6

Yield: 0.0

Momentum: 6.5

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

115.99$

Current Price

115.99$

Potential

-0.00%

Expected Cash-Flows