NetApp Inc (NASDAQ:NTAP) Reports Mixed Q2 FY2026 Results with Strong Earnings Beat but Cautious Guidance

Last update: Nov 26, 2025

NetApp Inc (NASDAQ:NTAP) reported financial results for the second quarter of fiscal year 2026 that presented a mixed picture for investors, leading to notable after-hours price movement. The data storage specialist surpassed analyst expectations for the quarter just ended but issued forward-looking guidance that fell short of current market forecasts.

Earnings and Revenue Versus Estimates

The company’s performance for Q2 FY2026 showed strength in profitability, though top-line growth was more modest.

Non-GAAP Earnings Per Share (EPS): Reported $2.05, surpassing analyst estimates of $1.92.
Revenue: Reported $1.705 billion, slightly below the analyst consensus of $1.722 billion.
Key Growth Metrics (Year-over-Year):
- Net revenues increased 3%.
- Hybrid Cloud segment revenue increased 3% to $1.534 billion.
- Public Cloud segment revenue increased 2% to $171 million.
- Billings increased 4% to $1.646 billion.

The standout figure was the significant earnings beat, which was over 8% above expectations. This indicates strong operational discipline and cost management, allowing the company to convert a slight revenue miss into a substantial profit outperformance.

Market Reaction and Price Action

The market's immediate reaction reflects the conflicting signals from the earnings report. Following the announcement, NetApp's stock was up approximately 3.2% in after-hours trading. This positive movement appears to be a direct response to the strong earnings beat, with investors rewarding the company's ability to generate higher-than-expected profit from its sales. The slight revenue miss was likely overlooked in favor of the robust bottom-line performance and the company's continued execution.

Financial Outlook and Guidance

While the past quarter was strong, the company's guidance for the upcoming periods introduced a note of caution.

Q3 FY2026 Revenue Outlook: The company provided a revenue guidance range of $1.615 billion to $1.765 billion. The midpoint of this range is below the current analyst sales estimate of $1.741 billion for the next quarter.
Full Year FY2026 Revenue Outlook: NetApp expects full-year revenues between $6.625 billion and $6.875 billion. This guidance falls short of the analyst sales estimate of $6.898 billion for the fiscal year.

This conservative outlook for future sales likely tempered more enthusiastic buying, preventing an even larger after-hours surge. It suggests management is anticipating potential headwinds or a more challenging demand environment in the near future.

Business Highlights and Strategic Initiatives

The earnings press release highlighted several key areas of innovation and market recognition that underpin the company's strategy.

AI-Driven Product Launches: NetApp emphasized its focus on AI-ready infrastructure, launching new platforms like NetApp AFX and the NetApp AI Data Engine, which integrates NVIDIA accelerated computing.
Cloud Partnerships: The company announced enhanced collaborations with major cloud providers, including Google Cloud, Amazon AWS, and Microsoft Azure, expanding its service capabilities and integration.
Industry Recognition: NetApp was recognized as a Leader in the 2025 Gartner Magic Quadrant for Enterprise Storage Platforms, reinforcing its competitive position.
Financial Health: The company reported strong cash generation, with cash provided by operations increasing 21% year-over-year to $127 million, and announced a quarterly cash dividend of $0.52 per share.

Conclusion

NetApp delivered a quarter of solid execution, characterized by an impressive earnings beat that drove a positive after-market reaction. However, investor optimism is being balanced by a revenue guidance for the coming quarters that is cautious relative to analyst expectations. The company is strategically positioning itself to capitalize on the growing demand for AI and hybrid cloud data management, but the market will be watching closely to see if its future sales can meet or exceed its current projections.

For a more detailed look at historical earnings and future analyst estimates, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. The author has no position in NETAPP INC (NTAP). Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.