Earnings Call
May 28, 2026
Q2 FY2026
EPS Estimate
2.27
EPS Actual
2.05
Post-Earnings Close
$174.29
Earnings Reaction
+22.4%
NetApp's fiscal Q2 2026 results were defined less by the headline revenue number, $1.71 billion, up 3% year over year, or 4% excluding the divested Spot business, and more by a profitability profile that continues to outrun expectations. Non-GAAP gross margin of 72.6% set a Q2 record and came in above the guided range, while operating margin of 31.1% and EPS of $2.05 both exceeded the high end of guidance and marked all-time highs. The margin story is being driven by a deliberate mix shift: all-flash and public cloud now represent 70% of total revenue, and the fastest-growing segments, first-party and marketplace cloud storage services (up 32% year over year) and Keystone storage-as-a-service (up 76% year over year), carry structurally higher gross margins than the legacy product base. Product gross margin reached approximately 59.5%, well above the company's own mid-to-high-50s long-term target, though management was careful to frame this as a favorable but not permanent level, noting that NAND cost dynamics could introduce modest headwinds into fiscal 2027.
Report generated on May 27, 2026
AI-generated earnings analysis. Not investment advice.
Chief Executive Officer
The quarter's results reflected a combination of company-specific execution and broader sector dynamics, with management addressing several of the key debates that analysts had flagged heading into the print. Guidance commentary pointed to continued momentum in the core segments, while questions on margins and capital allocation drew more nuanced responses from the leadership team over the course of the call.
The quarter's results reflected a combination of company-specific execution and broader sector dynamics, with management addressing several of the key debates that analysts had flagged heading into the print. Guidance commentary pointed to continued momentum in the core segments, while questions on margins and capital allocation drew more nuanced responses from the leadership team over the course of the call.
The quarter's results reflected a combination of company-specific execution and broader sector dynamics, with management addressing several of the key debates that analysts had flagged heading into the print. Guidance commentary pointed to continued momentum in the core segments, while questions on margins and capital allocation drew more nuanced responses from the leadership team over the course of the call.
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