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Core Insights - NetApp (NTAP) reported quarterly earnings of $2.05 per share, exceeding the Zacks Consensus Estimate of $1.89 per share, and showing an increase from $1.87 per share a year ago, resulting in an earnings surprise of +8.47% [1] - The company achieved revenues of $1.71 billion for the quarter ended October 2025, surpassing the Zacks Consensus Estimate by 1.09% and up from $1.66 billion year-over-year [2] - NetApp has outperformed consensus EPS estimates three times over the last four quarters, indicating a positive trend in earnings performance [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.07 on revenues of $1.71 billion, while for the current fiscal year, the estimate is $7.77 on revenues of $6.76 billion [7] - The trend of estimate revisions for NetApp was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6] Industry Context - The Computer-Storage Devices industry, to which NetApp belongs, is currently ranked in the top 19% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - NetApp, Inc. reported strong second-quarter earnings, surpassing both revenue and earnings estimates, leading to a significant increase in stock price [1][2] Financial Performance - Quarterly earnings were $2.05 per share, exceeding the consensus estimate of $1.89 [2] - Quarterly revenue reached $1.71 billion, beating the Street estimate of $1.69 billion [2] Business Highlights - The revenue growth was attributed to high demand for AI solutions, first-party and marketplace cloud storage services, and all-flash offerings, as stated by CEO George Kurian [3] - All-flash array revenue grew 9% year-over-year to $1 billion, resulting in an annualized net revenue run rate of $4.1 billion [4] - Public Cloud revenue was $171 million, driven by first-party and marketplace storage services, which grew 32% year-over-year [4] - Billings for the quarter were $1.65 billion, reflecting a 4% year-over-year growth, marking the eighth consecutive quarter of growth [4] Future Outlook - The company raised its fiscal 2026 adjusted EPS guidance to a range of $7.75 to $8.05, while affirming its revenue guidance of $6.63 billion to $6.88 billion [4] - The stock price increased by 4.06% to $116.01 in extended trading following the earnings report [4]

Q2 FY26 EARNINGS RESULTS © 2025 NetApp, Inc. All rights reserved. Safe harbor 2 © 2025 NetApp, Inc. All rights reserved. • This presentation contains forward-looking statements and projections about our strategy, products and services, including our AI capabilities and initiatives, shareholder returns, and our future results, performance or achievements, financial and otherwise. These statements and projections reflect management's current expectations, estimates and assumptions based on the information cur ...

Market Overview - The trading day ended with the Dow Jones Industrial Average up more than 600 points, a 1.4% increase, and the S&P 500 rising over 60 points, or 0.9% [6] - The Nasdaq composite finished higher by about 0.7%, with small and mid-cap stocks, particularly the Russell 2000, outperforming, up 2% [7] - Overall, 426 names in the S&P 500 gained ground, while only 74 declined, indicating strong market breadth [8] Company Performance - Alphabet shares have seen a significant year-to-date gain of approximately 70%, outperforming many competitors [5] - Autodesk reported a third-quarter EPS of $2.67, beating expectations of $2.50, with net revenue of $1.85 billion, slightly above the forecast of $1.81 billion [11] - Workday's after-hours share price increased by about 7% after it raised its full-year subscription revenue forecast, projecting fourth-quarter subscription revenue of $2.36 billion, above the estimate of $2.35 billion [13] - NetApp shares surged by 4% in after-hours trading after the company boosted its fiscal year adjusted EPS forecast and reported third-quarter net revenue expectations of $1.77 billion, exceeding estimates [15] - Urban Outfitters saw a significant increase in share price, up 9% in regular trading and 16% in after-hours, with third-quarter comp retail segment sales up 8%, surpassing the 5% estimate [25] Sector Insights - The technology sector experienced mixed results, with Alphabet hitting an all-time high while Nvidia shares fell by 2.6% [9][20] - Retailers showed strong performance, with Abercrombie and Fitch gaining about 36-37% after raising its 2026 net sales and EPS guidance [17] - Dell raised its full-year adjusted EPS outlook to $9.92, up from $9.55, and increased revenue guidance to a range of $11.2 billion to $12.2 billion [22][24]

Core Insights - NetApp exceeded Wall Street expectations for second-quarter profit and revenue, driven by robust demand for its data storage services and all-flash storage products utilized in artificial intelligence applications [1] Financial Performance - The company reported a significant increase in revenue, attributed to strong sales in its data storage segment [1] - Profit margins improved due to the high demand for all-flash storage solutions, which are increasingly being adopted in AI technologies [1] Market Demand - There is a notable surge in demand for data storage services, particularly in sectors leveraging artificial intelligence [1] - The trend towards all-flash storage products is becoming more pronounced as companies seek faster and more efficient data management solutions [1]

Financial Performance - Total net revenues for the three months ended October 24, 2025, were $1,705 million, a 2.8% increase from $1,658 million for the same period in 2024[20] - Net income for the three months ended October 24, 2025, was $305 million, up from $299 million in the same period of 2024, representing a 2.0% increase[22] - NetApp reported net income of $538 million for the six months ended October 24, 2025, compared to $547 million for the same period in the previous year, reflecting a decrease of approximately 1.6%[28] - Total net revenues for the three months ended October 24, 2025, were $1,705 million, compared to $1,658 million for the same period in 2024, reflecting a year-over-year increase of 2.8%[92] - Revenues from the Americas for the three months ended October 24, 2025, were $863 million, slightly up from $862 million in the same period of 2024[95] Profitability - Gross profit for the six months ended October 24, 2025, was $2,325 million, compared to $2,275 million for the same period in 2024, reflecting a 2.2% increase[20] - The gross profit margin for Hybrid Cloud was 71.4% for the three months ended October 24, 2025, slightly down from 71.8% in the same period of 2024[92] - Total gross profit for the six months ended October 24, 2025, was $2,325 million, compared to $2,275 million for the same period in 2024, marking an increase of 2.2%[94] Cash Flow and Liquidity - Cash flows from operating activities for the six months ended October 24, 2025, were $800 million, compared to $446 million for the same period in 2024, indicating a significant increase[25] - Total cash and cash equivalents decreased to $2,072 million as of October 24, 2025, down from $2,742 million as of April 25, 2025, representing a decline of about 24.4%[39] - Cash, cash equivalents, and short-term investments decreased by $832 million to $3.0 billion as of October 24, 2025, primarily due to debt repayment and stock repurchases[155] Assets and Liabilities - Total current assets decreased to $4,654 million as of October 24, 2025, down from $5,851 million as of April 25, 2025, a decline of 20.4%[15] - Total liabilities decreased to $8,644 million as of October 24, 2025, from $9,783 million as of April 25, 2025, a reduction of 11.6%[17] - Total stockholders' equity as of October 24, 2025, was $986 million, a decrease from $1,040 million as of April 25, 2025[17] - The company’s total liabilities decreased to $1,277 million as of October 24, 2025, down from $1,401 million as of April 25, 2025, indicating a decline of approximately 8.8%[43] Stock and Dividends - The company repurchased $550 million of common stock during the six months ended October 24, 2025[25] - The company declared cash dividends of $0.52 per common share during the reporting period[27] - Cash dividends declared were $207 million for the six months ended October 24, 2025, compared to $213 million for the same period in the previous year, a decrease of approximately 2.8%[28] - Dividends declared per share remained at $1.04 for the six months ended October 24, 2025, with total dividend payments allocated to retained earnings amounting to $65 million[75] Expenses - Research and development expenses for the three months ended October 24, 2025, were $251 million, slightly down from $257 million in the same period of 2024[20] - Total operating expenses for Q2 and the first six months of fiscal 2026 were $805 million (47% of net revenues) and $1,592 million (49% of net revenues), reflecting a decrease of two percentage points year-over-year[140] - Sales and marketing expenses decreased by 4% in Q2 and 3% in the first six months of fiscal 2026 compared to the prior year, totaling $465 million and $926 million respectively[142] - General and administrative expenses increased by 16% in Q2 and 14% in the first six months of fiscal 2026, totaling $77 million and $173 million respectively[146] Restructuring and Charges - The company incurred restructuring charges of $25 million during the first six months of fiscal 2026, with a balance of $32 million remaining at the end of the period[80] - Restructuring charges recorded in the second quarter of fiscal 2026 totaled $23 million, contributing to a total of $25 million for the first six months[118] Future Projections - Future amortization expense related to purchased intangible assets is projected to be $31 million, with $9 million for the remainder of fiscal 2026 and $21 million for fiscal 2027[38] - Capital expenditures for the remainder of fiscal 2026 are anticipated to be between $90 million and $140 million[170] Other Financial Metrics - The effective tax rate for the six months ended October 24, 2025, was 22.8%, an increase from 17.0% in the prior year[81] - Interest income for the three months ended October 24, 2025, was $27 million, while interest expense was $(26) million, resulting in total other income of $(6) million[49] - The company has a total of $2.5 billion in Senior Notes, with maturities ranging from June 2027 to March 2035[166] Market and Sales - Hybrid Cloud product revenues for the three months ended October 24, 2025, were $788 million, an increase from $768 million in the same period of 2024, representing a growth of 2.6%[92] - Public Cloud revenues for the three months ended October 24, 2025, were $171 million, up from $168 million in the same period of 2024, indicating a growth of 1.8%[92] - Product revenues for the second quarter of fiscal 2026 were $768 million, a 3% decrease from $788 million in the same period of fiscal 2025[123] - Services revenues for the second quarter of fiscal 2026 were $917 million, reflecting a 3% increase from $890 million in the same period of fiscal 2025[126]

Exhibit 99.1 NetApp Reports Second Quarter of Fiscal Year 2026 Results Net revenues of $1.71 billion for the second quarter, an increase of 3% year-over-year; Second quarter GAAP net income per share 1 of $1.51 and record non-GAAP net income per share 1 of $2.05 News Summary (In millions, except earnings per share and percentages) GAAP Results | | | Q2'FY26 | | Q2'FY25 | % | Change | | --- | --- | --- | --- | --- | --- | --- | | Net revenues | $ | 1,705 | $ | 1,658 | | 3% | | Hybrid Cloud segment revenue | ...

Market Overview - U.S. stock futures showed slight declines, with Nasdaq 100 down approximately 0.19%, S&P 500 down around 0.10%, and Dow Jones down about 0.13% following a strong performance in the previous session [2] - The S&P 500 climbed 1.55% to close at 6,705.12, the Nasdaq Composite surged 2.69% to settle at 22,872.01, and the Dow Jones gained around 202.86 points, or 0.44%, to end at 46,448.27 [3] Economic Indicators - Key economic reports are anticipated, including October's U.S. retail sales and Producer Price Index (PPI) readings, which are crucial for assessing inflation and consumer spending [4] - Upcoming reports include October Durable Orders, November Chicago PMI, October New Home Sales, and October Personal Income and Outlays [4] Company Performance - Alphabet (GOOGL) shares rallied over 6% following the announcement of its upgraded AI model, Gemini 3 [5] - Other AI-related companies saw strong performance: Broadcom surged 11.1%, Micron Technology gained about 8%, Palantir Technologies rose 4.8%, and Advanced Micro Devices advanced 5.5% [5] - Alibaba Group shares surged 5.1% after announcing its AI app, Qwen, had 10 million downloads in its first week [6] - Novo Nordisk shares tumbled 5.6% after a clinical trial for its Alzheimer's treatment failed [6] - Corporación América Airports shares gained 1.6% after reporting third-quarter revenues that beat estimates [6] Market Sentiment - There is a growing expectation of a Federal Reserve interest rate cut in December, with traders betting on an 85% probability of a rate cut next month [8] - Recent dovish remarks from Fed officials have contributed to this shift in expectations, positively impacting stock performance despite concerns about AI sector valuations [8]

Core Points - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] - It highlights that users with ad-blockers may face restrictions when trying to access content [1] Summary by Categories Technical Requirements - Users are advised to enable Javascript and cookies in their browsers to ensure proper functionality [1] - The presence of ad-blockers can lead to blocked access, necessitating their disabling for content access [1]